The Energy and Petroleum Regulatory Authority (EPRA) has left the prices of all three petroleum products unchanged in its scheduled review on Wednesday. This decision is surprising as many expected a considerable rise to costs from the prevailing high international crude price but EPRA still remains cautious about any changes that could be costly for residents here especially with their current economic situations.
The general lack of fluctuations in the prices for all three goods means that Kenyans can expect to pay a largely constant price over the next month, until August 14th 2021. The government put this program into place called Fuel Price Stabilization Fund (FPS) and it will remain despite being without adequate regulations meaning no kerosene vessel had any discharge at Mombasa during review period thus contributing to hold on cost in commodity
The effect of the subsidy is for instance visible on supplier margins to oil marketing companies (OMCs).
The margins for petrol suppliers have for instance come down to Ksh.8.82 per litre from Ksh.12.39 last month while margins for the supply of diesel and kerosene have come down to Ksh.5.05 and Ksh.6.04 from Ksh.8 and Ksh.8.93 respectively in June.
The price of petrol in the capital city of Nairobi will remain at Ksh.127.14 per litre while that of diesel and kerosene will stand at Ksh.107.66 and Ksh.97.85.
With fuel prices at an all-time high, it is no surprise that the government of Kenya may be forced to rely on a new stabilization mechanism. In particular, Murban crude reached Ksh 7884 per barrel ($73) last week–more than double the cost seen just months ago as COVID 19 spread across economies worldwide in early October.
International demand for oil has spiked since reopening amid widespread economic growth and international trade have led to both price inflation and supply shortages that persist today