Fuel Prices Likely To Fall As Petrol Landed Costs Drop In September

Petrol prices are likely to fall marginally this month following a ten percent drop in the landed cost of the commodity in September.

Data from the Energy and Petroleum Regulatory Authority (EPRA) show that the landed cost of petrol dropped from $920.05 per metric tonne in August to $820.6 per metric tonne in September. The price fall is expected to be extended to the pump prices, coming as a relief to the consumers.

The landed cost for diesel has at the same time dropped by 5.6 percent from $960.54 per metric tonne in August to  $906.72 in September. Meanwhile,  Kerosene import prices dropped from $1015.91 per metric tonne in August to $921.19 for the same quantity in September.

The government is at the same time likely to end the 20.8 shillings and the 26.2 shillings per liter subsidy being enjoyed by diesel and Kerosene consumers just like it did on petrol last month. This means that the pump prices for these commodities might record a slight or no change given that the subsidy withdrawal may wipe out the landed cost fall.

The Withdrawal of fuel subsidies by the government last month saw a liter of petrol jump to 179.30 shillings and 176 shillings in Nairobi and Mombasa respectively, an increase of 20 shillings per liter from the last review on August 14 when the commodity cost 159.12 shillings.

Equally, a liter of diesel jumped to 165 shillings from 140 shillings, while a liter of kerosene rose to 147. 94 shillings from 127.94 in August 2022 in Nairobi. EPRA partially retained subsidies for diesel and kerosene at 20.82 and 26.25 shillings respectively which are likely to be lifted.

An increase in diesel prices which is largely used by transport trucks, buses, and farm equipment may still push up the cost of living which hit a 61-month high in September when inflation hit 9.2 percent. Manufacturers use fuel to transport their products. The commodity is also used to power machines in manufacturing companies as well as in the agricultural sector, meaning that the effects of the high price will consequently be passed to the consumers.

The cost of electricity has similarly gone through the roof owing to the soaring diesel prices. Diesel is used to power machines in thermal plants and the extra cost is passed to the consumers in power bills.