Petrol prices rise as kerosene, diesel fall

Petrol prices in Nairobi have risen by the widest margin in four years to sell at Sh5.77 higher per litre, even as diesel and kerosene prices dropped by Sh3.80 and Sh17.31 respectively in changes announced by the energy regulator on Sunday.

The rise in petrol prices, driven by recovery on the international crude oil market, now reverses three months of a steep drop in prices that saw the product sell Sh18 per litre cheaper in April.

The marginal drop in diesel prices was attributed to lower demand as summer catches on and the need for heating falls in Europe and America while kerosene, which falls in the same class with Jet A1, lost demand due to the grounding of air travel.

The Sh13.30 difference between diesel and kerosene prices, however, presents fears of fuel adulteration in the local market since crooks who mix the two are attracted by the price margins between the two products.

The Energy and Petroleum Regulatory Authority said the changes in the pump prices came as a result of shifts in landed costs of the three products, which decreased for diesel and kerosene and rose for petrol.

“The changes in this month’s prices are as a result of the average landed cost of super petrol increasing by 31.54 percent from $188.7 per cubic meter in April to $248.21 per cubic meter in May 2020, diesel increasing 5.58 percent from $242.13 per cubic meter to $228.62 and kerosene decreasing by 51.84 percent from $262.44 per cubic meter to $126.39 per cubic meter,” EPRA Director General Pavel Oimeke wrote.

The government in September introduced a Sh18 per litre adulteration levy on kerosene to discourage its use as an adulterant by a fuel cartel who targeted the wide price margin between kerosene and diesel to make millions.

Since then, kerosene pricing has either matched that of diesel or remained slightly higher with the latest pricing reversing the trend.

In the latest pricing, a litre of petrol will cost Sh89.10 per litre in the capital city, an increase from the current Sh83.33 while that of diesel will be sold at Sh74.57. Kerosene will retail at Sh62.46 per litre in Nairobi.

The drop in the price of diesel presents a four-year low with its steepest drop recorded last month when it was priced close to Sh20 cheaper to retail at Sh78.33 per litre.

The changes in motor fuel brings mixed fortunes for fuel dealers, some of who had begun betting with the June pricing by hoarding the commodity to make a kill after Sunday’s price revision as they stand to gain in petrol and lose in diesel value if they had hoarded.

The costs of energy and transport have a significant weighting in the basket of goods and services used to measure inflation in Kenya making cheaper diesel this month a welcome relief on the cost of transport and the cost of living in general. The country’s overall inflation dropped to 5.47 percent last month from a revised 5.62 per cent in April 2020, according to data by the Kenya National Bureau of Statistics.