Kenyans disappointed with hike in fuel prices

by Elayne Wangalwa 0

Since the beginning of 2015 Kenyans have been enjoying the cost of low pump prices as a result of the momentous fall of global oil prices.

However, their joy has been short lived as the country’s energy regulator recently announced an increase in petrol prices.

The higher pump prices have seen diesel increased by 0.68 Kenyan shillings per litre to retail at 76.20, kerosene increased by 3.35 Kenyan shillings per litre to retail at 55.75, while that of super petrol increased by 4.75 Kenyan shillings per litre to 89.46.

The Energy Regulatory Commission (ERC) has cited that the increase in fuel prices is influenced by the exchange rate.

“Petroleum products imported into Kenya are paid in US dollars. For the costs to be incorporated in the pricing formula, an exchange rate is used to convert the US dollar component into Kenyan shillings. As a result, when the Shilling depreciates against the US Dollar, more shillings would be required to purchase a given volume of product,” ERC said in a statement.

Nevertheless, the country’s consumer lobby group has called on the regulator to publish all raw data on how it arrives at the final price.

“It is inconceivable how ERC’s anti-consumer pricing formula purports to regulate fuel prices when it has no direct control of factors of the said pricing.”

Consumer Federation of Kenya (COFEK) said, “The increase in fuel prices, as per our earlier prediction, is a confirmation that the problem with Kenya’s highly unpredictable oil pricing largely emanates from the regulator’s unjustified obsession with price controls.” 

The move by ERC prompted Kenyans to air their views on social media expressing their disappointment on the new prices.

Kenya Private Sector Alliance chairman Vimal Shah said, “There is absolutely no reason for prices of petrol and diesel to have gone up.”

“This fraudulent fuel hike should be resisted. Allowing it is accepting a massive robbery of the taxpayer,” social justice activist, Al-Amin Kimathi said.

Speaking to, Rich Management CEO, Aly Khan Satchu also conveyed his disappointment on the regulator’s decision.

“The shilling has been extremely strong, it is down about 3 per cent, there is no justification for this mark up in oil prices coming out of the currency and I wish the ERC would stop using it as a justification. It makes us all feel that they are actually not up to what they should be doing,” Satchu said.

“Therefore, if we want our economy to grow at double digits at GDP rate, the ERC have to change their methodology. Because this is beyond the limit, beyond the tolerance level of individuals, right now we should have an enormous boost, the price of fuel should have been at 60 Kenyan shillings a litre but it is not.”

Meanwhile, according to the World Bank’s latest report on Kenya’s Economic Update Kenya’s fuel is over-priced. Nonetheless, the regulator purports the report relies on crude oil prices rather than refined products, stating Kenya has now imported crude oil for over a year.

The consecutive drop of fuel prices in the East African country from September 2014 to February 2015 had previously contributed to a decline in inflation.