Kenyans on Saturday got a relief following announcement of the highest drop in fuel prices since the government started regulating pump prices in 2010.
The move is expected ease pressure on the cost of living which has been slowly eroding purchasing power of consumers, as prices of basic commodities skyrocket.
According to a statement released on Saturday by the Energy Regulatory Commission, the price of regular petrol will fall by Sh11.7 while that of super will be Sh9.21 less. Kerosene and diesel prices will fall by Sh8.01 and Sh8.08 respectively.
The downward price review is expected to result to cheaper products and lower transport costs. Petroleum prices directly affect manufacturing, transport and electricity costs.
In June, inflation stood at 10.05 per cent having fallen from 18.31 in January this year. In his budget speech last month, Finance Minister Njeru Githae expressed the Government’s desire to bring the figure to a single digit.
Following Saturday’s drop, a litre of super petrol will retail at Sh108.46 in Nairobi, diesel at Sh97.50- the first time the price of diesel has fallen below the Sh100 mark since March 2011 in Nairobi- and kerosene Sh74.40. Regular petrol will retail at Sh105.76.
In Mombasa where the prices are lowest super petrol will trade at Sh105.22 a litre, diesel Sh94.28, kerosene Sh71.63 and regular petrol Sh102.92.
In Mandera, where the pump prices are the most expensive, a litre of super petrol will retail at Sh120.98, diesel at Sh110.02, kerosene at Sh86.92 and regular petrol Sh106.28. The prices will be in force until August 14.
Energy Regulatory Commission through a statement signed by acting director Linus Gitonga on behalf of the Director-general Kaburu Mwirichia attributed the decrease to a fall in international crude and refined fuel prices.
“The downward trend in the price of crude and refined petroleum products in the international market observed in the last three months has continued to hold,” he said.
The Free on Board price of Murban Crude oil in June was US $ 97.35 per barrel, a decrease of 11.98 per cent from US$ 110.60 in May.
During the period, the price of imported super petrol fell 8.01 per cent, diesel 8.74 per cent and kerosene 0.19.
Over the period, the exchange rate for the Kenyan shilling, a factor previously blamed for fuel price increases, improved marginally from Sh84.74 against the US $ to Sh84.40 in June.
“Any further gains that may arise from these positive changes will be passed to consumers in subsequent reviews,” Mr Gitonga said.
Consumers Federation of Kenya (Cofek) in a statement called on ERC to ensure the gains are maintained in the next monthly review.
“The development is welcome news to the economy. With the development, electricity prices should come down so as to ease the inflation further and with it have banks lower their interest rates,” it said.
The news comes a few days after Canadian oil firm Africa Oil it had discovered additional 43 metres of potential oil well on the lower section of Ngamia 1, Turkana County, above the 100 metres previously reported.
It will however take several years before the deposits are commercially exploited.