While it has been a tough year riddled with high food prices and job losses, there is a glimmer of hope for Kenyans who will pay less for fuel this Christmas compared to last year.
In its monthly review, the Energy and Petroleum Regulatory Authority announced a reduction of Sh1.09 for a litre of super petrol with diesel and kerosene prices dropping by Sh2.83 and Sh1.75 respectively.
This means super petrol, diesel and kerosene will now retail at Sh109.50, Sh101.78, and Sh102.31 respectively in Nairobi.
According to EPRA, the new price has been informed by the revised rates for the Import Declaration Fee (IDF) which grew to 3.5 per cent, from two per cent and the Railway Development Levy (RDL) of two per cent in line with the Finance Act 2019.
This is a slight relief for consumers given a litre of super petrol, diesel and kerosene were retailing at Sh113.54, Sh112.28 and Sh105.22 over the same period last year.
Fuel prices have been on a steady rise after the eight per cent levy on petroleum was effected in September 2018.
Data by the Kenya National Bureau of Statistics shows the average retail price of super petrol was lowest at Sh101.13 in February while hitting an all-time high of Sh116.14 in July.
The average retail price of petrol stood at Sh109.47 this year.
The lowest average price of diesel was recorded atSh96.83 in February, hitting highs of Sh105.57 in June while kerosene prices averaged at sh97.63 in March, rising to Sh105.48 in June.
Since the eight per cent VAT on fuel products was introduced kerosene prices have grown by more than 25 per cent, largely affecting households that still rely on the fuel for cooking and lighting.
The fuel also attracts an Anti-adulteration levy, part of government’s efforts to curb fuel adulteration.
Given the price review takes into account a cumulative nine taxes and levies, nearly half of the cost of a litre of fuel goes to the state as tax.
The taxes include Excise Duty, Road Maintenance Levy, Petroleum Development Levy, Petroleum Regulatory Levy, Railway Development Levy, Merchant Shipping Levy, Import Declaration Fee and Value Added to all petrol and diesel imports,
Kenya is yet to feel the impact of the drone attack on Saudi's two major oil facilities in September which is reported to have knocked out five per cent of the global oil production, leading to a price surge on crude.
This, given fuel prices have been declining since September’s review.
Independent petroleum industry analyst Kevin Adundo, said the impact is likely to be felt after two to three months.
"We bring in refined products. The people buying crude right now will get it at a higher price so if you factor in the refining costs and the period before the products reach Kenya, it might take a few months before we feel the impact of Saudi Arabia," Adundo said, "Give it two to three months."
EPRA data shows the cost of super petrol dropped from Sh112.81 in September to Sh108.05 in October, diesel dropped to Sh103.04 from Sh101.96 while kerosene rose from Sh100.64 to Sh101.08.
November fuel prices for Super petrol, diesel and kerosene then increased by Sh2.54, Sh2.65 and Sh2.98 per litre respectively.
