The government is considering placing a cap on fuel prices, a move that is expected to cushion consumers from uncontrolled pricing.
Yesterday, the Energy and Petroleum Regulatory Authority (EPRA) placed a notice in a local daily scheduling public hearing on the matter as discussed in the Cost of Service Study in the Supply of Petroleum Products (COSSOP) commissioned in July 2017.
‘’The Energy (Petroleum Pricing) Regulation 2010 provides for a framework for the setting of maximum retail prices for Premium Motor Spirit (PMS), Automotive Gas Oil (AGO) and Illuminating Kerosene (IK),’’ EPRA said in a notice.
The agency added that the regulation provide for the use of a cost surplus formula that factors in the landed cost, storage and distribution costs, taxes and supplier margins.
Putting a maximum cap on fuel prices is likely to shield consumers from perennial upward fluctuations whose spiral effect has been the high cost of living.
It is also likely to put to end artificial fuel shortages caused by hoarding by suppliers in anticipation of better pricing.
Motorists and households using kerosene in Kenya have since January been forced to dip deeper in pockets to buy fuel as global prices roseMotorists and households using kerosene in Kenya have since January been forced to dip deeper in pockets to buy fuel as global prices rose on high global demand as a result of trade wars between US, Iran and China.
For insistence, the price per barrel rose to a six-month high of Sh7,512 ($74) after US tightened sanctions on Iranian oil exports down to zero on April 24 to avoid global price disruptions, a move that pushed up global fuel prices.
This saw a litre of super petrol in Nairobi rise by Sh15 to retail at Sh115.10, diesel Sh104.76 and Kerosene at Sh104.28 per litre the following month.
In the latest monthly review by EPRA, prices of diesel and kerosene declined by Sh.088 and Sh2.31 per litre to retail at Sh103.88 and Sh101.97 respectively in Nairobi. Price of petrol in Nairobi increased by Sh0.29 to retail at Sh115.39 per litre.
The study commissioned in 2017 by EPRA, then ERC was to review the existing supply chain system processes to identify and quantify costs while seeking ways to improve efficiency.
The energy and fuel regulator has planned a stakeholder consultative hearing in four towns in Kenya starting Friday this week and August 2 in Nyeri, Eldoret, Kisumu and Mombasa
‘’In accordance with Article 33 of the Constitution, the authority will conduct national stakeholder workshops with a view of sensitizing consumers, petroleum dealers, national and county governments on the planned implementation of COSSOP study and KPC pipeline tariff,’’ the notice said.
