In recent times, fuel prices in Kenya have surged past Ksh.200 for petrol, diesel, and kerosene.
This increase is due to a combination of factors, including taxes, importers looking to make more money, and storage fees.
Trade CS Moses Kuria has also hinted that fuel prices could continue to rise by Ksh.10 each month until February of next year.
The Energy and Petroleum Regulatory Authority (EPRA) has provided data that sheds light on how these factors pushed up fuel prices.
For example, the taxes alone raised the price of petrol by Ksh.95.71 per liter, resulting in a pump price of Ksh.211.64 in Nairobi, up from a landing cost of Ksh.115.93.
For diesel, the charges added Ksh.83.36 per liter, bringing the price to Ksh.200.99, and Ksh.78.83 for kerosene, raising the price to Ksh.202.61.
EPRA notes that without these taxes, the landing costs for these fuels would be Ksh.115.93 for super petrol, Ksh.117.63 for diesel, and Ksh.123.78 for kerosene.
EPRA conducted a night calculation, revealing that the existing 16 percent VAT on petroleum products, a road maintenance levy (which increased petrol and diesel prices by Ksh.18 per liter), and an anti-adulteration levy (raising kerosene prices by Ksh.18 per liter) were major contributors to the high fuel prices.
Other taxes that played a role in the price increase included excise duty, petroleum development levy (formerly used for a controversial fuel subsidy), railway development levy, and the import declaration fee.
EPRA Director General Daniel Kiptoo mentioned that the continuous depreciation of the Kenyan shilling against the US dollar also played a part in making refined oil purchases more expensive.
This means the government has limited control over the situation for now.
“The average landed cost of imported Super Petrol increased by 4.80 percent from USD 739.21 per cubic meter in July 2023 to USD 774.67 per cubic meter in August 2023.
“Diesel increased by 12.52 percent from USD 701.99 per cubic meter to USD 789.89 per cubic meter while Kerosene increased by 19.79 percent from USD 690.58 per cubic meter to USD 827.26 per cubic meter,” Epra says adding that inflation also made it hard to lower the cost of fuel.
While food prices decreased in August compared to July, the rise in fuel prices may change this trend.
For instance, cooking oil prices dropped by 1.2 percent, maize grains by 8.2 percent, fortified maize flour by 6.1 percent, beans by 1.3 percent, potatoes by 3.5 percent, and cabbages by 2.6 percent.
However, sugar prices increased by 3.2 percent, and mangoes saw a 6.1 percent price hike.
The new diesel prices could potentially lead to higher food prices shortly.
