Fuel prices will remain the same in this month’s EPRA review even with rising crude oil costs, subsidized by the Petroleum Development Levy.
The State is set to pay marketers billions of shillings through a fuel subsidy to keep pump prices unchanged and ease public anger over the rising cost of living.
Marketers will fully be compensated for their margins of Kes 12.39 per litre of super petrol and Kes 12.36 for diesel. Hence prices at the pump remain unchanged at Kes 110.60 for diesel and Kes 129.72 for super petrol.
“Despite the increase in the landed costs, the applicable pump prices for this cycle have been maintained as the ones in the previous cycle. The government will use the Petroleum Development Levy to cushion consumers from the otherwise high prices,” Daniel Kiptoo, the EPRA director-general, said in the notice yesterday.
The energy regulator last month reinstated the fuel prices subsidy after State House intervention, cutting monthly pump prices that lasted to yesterday for the first time since June.
The Treasury earlier revealed that it had exhausted the Kes 31 billion set aside to subsidise fuel prices after it diverted Kes18.1 billion to support standard gauge railway (SGR) operations under Chinese operators.
The subsidy scheme is supported by billions of shillings raised from fuel consumers through the Petroleum Development Levy, which was increased to Kes 5.40 a litre in July last year from Kes 0.40, representing a 1,250 per cent rise. The fund is meant to cushion consumers from volatility in fuel prices but has also seen motorists lose out when paying the additional Kes 5.40 for a litre at the pump.
Without the subsidy, motorists would have paid a historic high of Kes 143.48 per litre of petrol and Kes 126.28 for diesel in what could have stoked pressure on inflation.
The costs of energy and transport have a significant weighting in the basket of goods and services that is used to measure inflation in the country. Producers of services such as electricity and manufactured goods are also expected to factor in the higher cost of petroleum.
The fuel prices will be in force from midnight 15th November to 14th December 2021.