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Kerosene prices jump 17% in 2018 on new excise levy

In Summary

•The average monthly price of Kerosene increased to Sh89.13 in 2018 compared to Sh66.04 the previous year

•This saw annual kerosene consumption drop by 69.7 million litres last year to 339.38 million litres

A man fills a bottle with Kerosene in Mathare, in Nairobi, Kenya August 10, 2017.
A man fills a bottle with Kerosene in Mathare, in Nairobi, Kenya August 10, 2017.
Image: REUTERS

The average monthly price of Kerosene has gone up Sh23.09 on account of the decision by National Treasury to raise excise duty on the commodity last June.

Data by the Kenya National Bureau of Statistics shows the average monthly price of Kerosene increased to Sh89.13 in 2018 compared to Sh66.04 the previous year. 

The move aimed at deterring rogue dealers from blending the cooking and lighting fuel with diesel and petrol, saw annual kerosene consumption drop by 69.7 million litres last year to 339.38 million litres compared to 2017.

 

Fuel adulteration leads to economic losses through unfair competition, unpaid taxes and the deterioration in performance of engines. 

Unsuspecting motorists who buy adulterated petrol and diesel incur high expenses repairing engine parts or purchasing new engines because of damage caused by substandard fuel.

KNBS data shows after President Uhuru Kenyatta signed the Finance Bill 2018 into law on September 21, the country’s Kerosene consumption dropped significantly.

Last year, monthly kerosene consumption peaked to a high of 39.75 million litres in May- before the bill was assented into law- gradually dropping to a low of 13.44 million litres in December.

The Energy Regulatory Commission director general Pavel Oimeke told the Star since the law came into effect, there has been a significant drop in cases of doctored fuel across the country.

In 2018, the Petroleum Institute of East Africa found that 80 per cent of imported Kerosene was being used by unscrupulous traders- mostly independent oil marketers- to dilute petrol and diesel for more profits.

"In a public statement from the Energy Regulatory Commission, it was confirmed that only approximately five million of the 33 million litres of Kerosene that are reported to be consumed monthly are actually used for lighting and cooking while the balance is used for adulterating diesel/petrol," PIEA chairperson Anne-Solange Renouard said.

According to PIEA, Kenya has been losing Sh34 billion annually through fuel doctoring.

Oimeke, however, said rogue traders were very crafty adding that they were investigating whether the unscrupulous business owners were now opting to use jet fuel.

“We suspect they may be diverting to jet fuel to adulterate diesel. We are looking into it,” he said.

KNBS data shows annual jet fuel consumption increased by 25.09 per cent to 674.39 million litres last year compared to 539.13 million litres in 2017.

Poor households who rely on the fuel to prepare meals and light their homes have been the hardest hit by the law, which has greatly increased their cost of living coupled with higher food prices as a result of poor weather conditions.