Relief for Wanjiku as kerosene price cut by Sh19

President William Ruto's government has cut the retail price for a litre of kerosene by Sh19 to ease the cost of living for those at the bottom of the economic pyramid. 

According to the new monthly prices by the Energy and Petroleum Regulatory Authority (Epra), a litre of kerosene will now retail at Sh170.06 from Sh188.74, the biggest drop in over a decade. 

In the period under review, the maximum allowed petroleum pump price for Super Petrol, Diesel and Kerosene will decrease by Sh5.31 per litre, Sh10.00 per litre and Sh18.68 per litre respectively.

Fuel consumers in Mombasa will part with Sh190.66, Sh177.21 and Sh166.99 for Super Petrol, Diesel and Kerosene respectively.

Meanwhile, those in Nakuru will pay Sh192.90 for petrol, Sh179.82 for diesel and Sh169.56 for Kerosene. Those in Eldoret will pay Sh193.67, Sh180.59 and Sh170.32 for petrol, diesel and kerosene respectively.

"The reduced prices will significantly reduce the cost of living in the country, which has been a thorn in the flesh for many Kenyans,'' the government spokesperson Isaac Mwaura said on official social media pages.

This is a relief to millions of Kenyans who rely on kerosene for cooking and lighting, with the latest Kenya Integrated Household Budget Survey indicating that households spend two per cent of daily wage on the product. 

The survey shows that nearly three-quarters of all Kenyan households stated that their main lighting fuel was kerosene, followed by electricity and collected firewood.

The price cut has defied the global trend where fuel rates have been rising on a supply glitch, following continued attacks on cargo ships in the Red Sea waterways by the Houthi rebels who are opposed to Israel's activities in the disputed Gaza strip with Palestine. 

According to Epra, the average landed cost for imported Super Petrol increased by 4.86per cent from $703.49 per cubic metre in February to $737.69 per cubic metre in March while that of diesel increased by 0.003 per cent from $722.49 per cubic metre to $722.51 per cubic metre.

However, that of kerosene decreased by 0.69 per cent from $730.35 per cubic metre to $725.31 per cubic metre," Epra boss Daniel Kiptoo said.

He assured the country that Epra was committed to observing fair competition and protection of their interests alongside those of investors in the energy and petroleum sectors.

Although Epra says that it imports refined oil, cutting processing fees, energy experts are worried that the price could soon surge due to the ongoing chaos in the geopolitical space. 

On Sunday, Iran responded to Israel's attack on its consulate in Damascus with hundreds of drones and missiles in an unprecedented attack that is likely to fuel more tension in the Red Sea waterways, further straining the global supply chain. 

"I don't understand the formula Kenya is using to defy the global trend. A barrel of Brent is heading to $90 in the international markets, especially on supply cuts executed by major oil producers,'' Petroleum sector analyst Tonny Kisaju told the Star. 

Last month, analysts at JP Morgans said that they see a barrel headed back to $100 levels due to transport impulse in Red Sea's Suez Canal, the shorted waterway route to the global market.  

Yesterday, Kiptoo also hailed the government-to-government oil import plan where appointed firms import fuel on credit guaranteed by the government to sell to local oil marketers in shillings. 

Under this deal, Kenya has managed to negotiate better rates with Gulf suppliers on top of a six-month repayment break that has played a role in stabilising the shilling. 

According to Kiptoo, the plan eases monthly pressure to source $500 million that used to overwhelm the country's limited forex reserves during the Open Tender System regime.

"The arrangement with Gulf oil firms has eased pressure on the shilling with a reduction in depreciation against the US dollar from a high of three per cent per month to a percentage,'' Kiptoo said.