The sustained rise in fuel prices is set to have a knockdown effect on Kenya's production chain, further pushing up the cost of living.
On Saturday, the Energy Regulatory Commission increased price of super petrol by Sh3.37 a litre while that of diesel and kerosene went up by Sh1.85 and Sh1.82 respectively.
Last month, the price for super petrol went up by Sh2.22 while that of diesel and kerosene increased marginally by Sh1 and Sh 0.94 respectively.
“The changes in this month’s prices have been as a consequence of the average landed cost of super petrol, diesel and kerosene,” ERC Ag director general Pavel Oimeke said.
The landed cost of super petrol, diesel and kerosene went up by 7.42, 6.13 and 4.76 per cent respectively between August and September.
The increase in pump prices likely to trigger a surge in consumer prices index which eased last month to settle at 183.66 from 184.72 the previous month, pushing inflation rate to 7.06, a six month low since March.
Considering that most consumer products in Kenya are transported by road in Kenya, manufacturers and movers are likely to pass additional fuel cost to consumers, making life more difficult for Kenyans who are already pressed by harsh microeconomic factors made worse by the tense political situation in the country since August.
The inflation rate for the month of October is therefore expected to be higher than 6.9 per cent as forecasted by IECONOMICS, an indication that the annual inflation rate is likely to be above the CBK's ceiling of between 2.5 per cent and 7.5 per cent
The country's inflation rate is currently at a monthly average of 9.3 per cent, with the least inflation rate of 6.99 per cent recorded in January while May had the highest so far of 11.7 per cent.
A litre of super petrol is now retailing at Sh101.67 in Nairobi while that of diesel and kerosene is Sh88.71 and Sh66.18 in that order.
In Kisumu, the retail price of super petrol has been capped at Sh103.64, diesel at Sh90.89 and kerosene at Sh68.11
Fuel is a bit cheaper in Mombasa where a litre of super petrol is going for Sh98.39. Diesel and Kerosene is retailing at Sh85.44 and Sh63.42 per litre.