Diesel price has gone down by Sh10. per litre to their lowest level in a year promising lower costs for goods and services.
“The changes in this month’s prices have been as a consequence of the average landed cost of imported super petrol decreasing by 14.87 per cent from $694.18 per ton in November 2018 to $590.92 per ton in December,” ERC Director General Pavel Oimeke said in a statement.
In Nairobi, a litre of super petrol will now retail at Sh104.21, diesel at Sh102.24 while a litre of kerosene will retail at Sh101.70.
In Mombasa, a litre of super petrol will retail at Sh101.60, diesel at Sh99.63 and kerosene at Sh99.09.
Petrol and diesel have now fallen to the level they were retailing before introduction of VAT on petroleum products in September, with eyes now on public transport operators to see whether they will pass on the benefit to commuters who have been enduring higher fares tied to the fuel charges.
“The Free On Board (FOB) price of Murban crude oil lifted in December 2018 was posted at $59.50 per barrel, a decrease of 12.5 percent from $68 per barrel in November 2018,” said ERC in its notice Monday.
“Ove the same period, the mean monthly dollar to shilling exchange rate appreciated by 0.27 percent from Sh102.44 per dollar in November to Sh102.16 in December 2018.” As a result, the regulator said, the landed cost of super petrol fell by 14.9 per cent from $694.18 per ton in November to $590.92 per ton in December, while that of diesel fell by 14.7 percent from $722.17 to $615.97. Since Kenya stopped refining crude in 2013, there is usually a time lag of between 30 and 45 days between the placement of import orders and delivery of the commodity at the port of Mombasa, meaning local prices do not immediately reflect global market trends.
Crude prices were on the downturn in the second half of 2018, going as low as $49 a barrel in late December, but are now rebounding to touch $60 a barrel. The cost of fuel, especially diesel, filters through to almost all the other sectors of the economy due to the transport factor in pricing of goods and services.
The fall in pump prices this month should ideally lead to easing of cost of living. In December, inflation stood at a 14-month high of 5.71 per cent, attributed to price and fare increases during the festive season. Motorists in Mombasa will continue to enjoy the lowest fuel costs, with a litre of petrol in the port city now retailing at Sh101.60, diesel at Sh99.60 and kerosene at Sh99.09.
In Nakuru, a litre of petrol will now be sold at Sh104.73, diesel and kerosene at Sh102.94 and Sh102.41 respectively. In Kisumu, petrol will retail at Sh105.73, while the pump prices for diesel and Kerosene have been set at Sh103.94 and Sh103.40 respectively.