The fuel price drop is the highest since the ERC was set up four years ago. Super petrol is down to 92 Kenyan shillings per litre, Diesel is at 83 Kenyan shillings per litre, while Kerosene is down to 65 Kenyan shillings in Nairobi.
The regulator took into account the weighted average cost of imported refined petroleum products permitting the reduction of super petrol by 9.13 Kenyan shillings while diesel and Kerosene went down by 7.50 and 5.78 respectively.
ERC’s mandate – which is to ensure the regulation of electrical energy, petroleum and related products, renewable energy and other forms of energy – also protects the interest of consumer, investor and other stakeholders.
Last month, the regulator announced a reduction of 4.94 Kenyan shillings for the price of kerosene per litre and 4.79 Kenyan shillings and 3.67 for super petrol and diesel, respectively.
According to Paul Mwai, CEO at AIB Capital, the reduction of pump prices is long overdue because of the global oil price drop which saw the benchmark crude fall to about 45 dollars a barrel on Wednesday.
“It is a big drop and it is encouraging and I expect that given where oil prices are we will see further big drops of similar magnitude in the coming months,” Mwai said.
“That is good news for Kenya because it will lower inflation and my prayer is that also that the central bank will also now reduce the reference rate of the 8.5 per cent and encourage banks to charge less on their loans.”
(READ MORE: Kenya retains interest rate again)
However, Kenya’s central bank retained its benchmark lending rate at 8.5 per cent for the tenth session in a row despite the country’s overall inflation declining in the last two months and the shilling remaining resilient.