Fuel Prices Dipping In Early Christmas Gift To Kenyan Motorists, Consumers
By Steve UMIDHA
Fuel prices will from midnight drop by a noticeable margin of up to Sh5 per litre as global oil demand continues to soften.
This is after the Energy and Petroleum Regulatory Authority (EPRA) Thursday announced a significant reduction in the cost of fuel products amid grievous public discontent over the high cost of living and over-taxation witnessed in the last months.
“In the period under review, the maximum allowed petroleum pump price for Super Petrol, Diesel and Kerosene decreases by Ksh 5.00 and Ksh4.01 per litre respectively.
In Nairobi, Super Petrol, Diesel and Kerosene will now retail at Kshs.212.36, Sh201.47 and Sh199.05 effective midnight for the next 30 days,” noted EPRA in its latest review.
The rockets and feathers phenomenon suggests that when crude oil prices increase then there is an immediate increase in pump fuel prices; whereas during crude oil prices decreases – as has been the case in the last few months, pump prices tend to adjust at a much slower pace.
Oil prices fell more than 3 percent on Tuesday to their lowest level in six months on concerns of oversupply.
Oil has weakened to a six-month low near $72 a barrel, even after OPEC+, which includes OPEC oil-exporting nations and allies such as Russia, on Nov. 30 announced a new round of production cuts for the first quarter of 2024, reported Reuters on Wednesday.
OPEC on Wednesday said it remained cautiously optimistic about 2024 oil market fundamentals and blamed “exaggerated concerns” about demand for a recent drop in prices, as it stuck to its relatively high 2024 oil use prediction.
OPEC kept its forecast for world oil demand growth in 2023 steady at 2.46 million barrels per day (bpd). In 2024, OPEC sees demand growth of 2.25 million bpd, also unchanged from last month.
The outlet further reported that the Group has consistently forecast stronger demand growth for next year than other forecasters such as the International Energy Agency, although the two have a similar view on 2023.
A larger group called OPEC+, consisting of OPEC members plus other oil-producing countries, formed in late 2016 to exert more control on the global crude-oil market. Canada, Egypt, Norway and Oman are observer states.
Back home, Kenya’s energy regulator EPRA, revises fuel prices on the 14th day of every month and the latest review comes in the backdrop of President William Ruto’s announcement last month pointing to a fall in December.
Speaking in Ndia, Kirinyaga County on November 18, Ruto said the government was taking the right measures to ensure fuel prices go down further every subsequent month.
“We have looked for ways to ensure fuel prices do not go past a certain point, many Kenyans will suffer,” the Head of State said in regards to the November review.
“The prices will reduce further next month and more and more in the following months. Until we ensure we can run our economy appropriately,” Ruto added.
Ruto further noted in his sentiments as he addressed Kenyans during the 60th Jamhuri Day celebrations (Independence Day anniversary) that Kenya’s economy was on an upward trajectory and that the sacrificial measures made by the government and Kenyans at large will soon pay off, defending the current tough economic measures saying the country’s economy has been ranked 29th fastest-growing by the World Bank.
In EPRA’s November 14 review, the price of super petrol remained at a high of Ksh.217 but the price of diesel and kerosene was slightly reduced by Ksh.2 per litre to Ksh.203.47 and Ksh.203.06 respectively in Nairobi.
EPRA’s prices raised concern as the international cost of fuel has been fluctuating over the last six months, falling drastically to USD 804 per metric ton in October – the lowest since May this year.
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