The Energy and Petroleum Regulatory Authority (EPRA) released its monthly statement on the maximum retail fuel prices in Kenya, effective from 15th March 2024 to 14th April 2024.
Notably, the maximum allowed price for Super Petrol, Diesel and Kerosene decreased by Kshs 7.2, Kshs 5.1, and Kshs 4.5 each respectively, and will retail at Kshs 199.2, Kshs 190.4, and Kshs 188.7 per liter respectively, from the February 2024 prices of Kshs 206.4, Kshs 195.5 and Kshs 193.2 respectively.
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What led to these drops?
The average landing costs per cubic meter for Super Petrol and Kerosene increased by 5.6% and 1.7% respectively to USD 703.5 and USD 730.4 in February 2024, from USD 666.2 and USD 718.5 respectively in January 2024, while Diesel decreased by 0.8% to USD 722.5 in February 2024 from USD 728.0 in January 2024.
The Kenyan shilling gained against the US Dollar by 10.0% to Kshs 148.0 in February 2024, compared to the mean monthly exchange rate of Kshs 164.4 recorded in January 2024.
“We note that fuel prices in the country have decreased, largely attributed to the government’s efforts to stabilize pump prices through the petroleum pump price stabilization mechanism. This has so far expended Kshs 9.9 bn in the FY2023/24 to cushion the increases applied to the petroleum pump prices, coupled with the ongoing appreciation of the Kenyan Shilling against the dollar and other major currencies,” said Cytonn Investments in their latest report.
Nevertheless, fuel prices in the country remain under pressure from the high taxation of petroleum products as provided in the Finance Act 2023. “We project that fuel prices will drop in the coming months as a result of the government’s efforts to mitigate the cost of petroleum through the pump price stabilization mechanism coupled with the expected further strengthening of the Kenyan Shilling against the United States Dollar, adding to the 13.9% year-to-date gain to Kshs 135.1 from Kshs 157.0 recorded at the beginning of the year.”