EPRA increases fuel prices as new VAT takes effect

Fuel prices have remained unchanged in this month's review by the energy regulator EPRA.

The Energy and Petroleum Regulatory Authority director general Daniel Kiptoo made the announcement in a statement on Monday evening.

"In the period under review, the maximum allowable petroleum pump prices for super, diesel and kerosene remain unchanged," he said.

He said the prices remain unchanged despite the average landed cost of imported fuel having increased in July by 64 per cent for super petrol, 4.29 per cent for diesel and 7.41 per cent for kerosene. 

"In order to cushion consumers from the spike in pump prices as a consequence of increased landed costs, the government has opted to stabilise pump prices for the August-September 2023 pricing circle," he said.

A litre of super petrol will therefore continue retailing at Sh194.68 in Nairobi, diesel at Sh179.67 while kerosene will go for Sh169.48.

In Mombasa, motorists will continue paying Sh191.62 for a litre of super petrol, Sh176.63 for diesel and Sh166.43 for kerosene.

The unchanged prices will remain in force until September 14, 2023.

Kiptoo said oil marketers will be compensated for the difference from the Petroleum Development Fund (PDF) at the rate of Sh7.33 per litre of super petrol, Sh3.59 per litre of diesel and Sh5.74 per litre of kerosene.

This means the actual cost of fuel in Nairobi is Sh202.01 for a litre of super petrol, Sh183.26 for diesel and Sh175.22.

The last time government subsidised all three fuel commodities was exactly a year ago during the August-September, 2022 fuel review.

President William Ruto scrapped the subsidies immediately thereafter upon assuming office on September 13 the same year.

He recently ruled out the reintroduction of the subsidies saying it's counterproductive.

While justifying imposition of subsidies on fetiliser, Ruto said the government was keen on taking policy interventions that would not be abused, subjected to corruption or diverted.

He said agriculture is an area the government believes will give the highest returns on subsidies compared to fuel.

"There is no way for example you can target fuel for agricultural production; it becomes a very difficult exercise to target but we can easily target fertiliser because you cannot use fertiliser to do anything else, only to planting,” he said while speaking at State House on August 2.

The fuel subsidy was introduced by former President Uhuru Kenyatta to cushion Kenyans from the high cost of living.

The programme was, however, sharply criticised especially by the Ruto brigade amid claims it was riddled with graft.