In a significant turn of events, fuel prices in Kenya have experienced the most substantial decline in over two years, plummeting by up to Sh5 per liter. This welcome relief for consumers stems from the global decrease in crude oil prices. Commencing this Friday, a liter of super petrol will be available at Sh212.36 in Nairobi, down from Sh217, while diesel will be priced at Sh201.47, a decrease from Sh203.47, marking the culmination of the latest monthly cycle scheduled to conclude on January 14 next year.
Comparatively, the last time pump prices registered such a noteworthy reduction was in October 2021. During that period, super petrol descended from Sh134.72 to Sh129.72 per liter, and diesel dropped from Sh115.6 to Sh110.6 per liter. This reduction mirrors the ongoing decline in global crude prices, offering Kenyan consumers respite and is expected to contribute to controlling inflation as the nation approaches the Christmas and New Year festivities.
The cost per liter of kerosene, primarily utilized for lighting and cooking in low-income households, has also seen a decline to Sh199.05 from Sh203.06.
This decline in prices corresponds with a decrease in the landed cost of refined fuel, coupled with the government’s sustained efforts to subsidize pump prices. The landed cost of super petrol witnessed the most significant decrease at 16.1 percent, amounting to $694.44 (Sh109,388) from $827.75 (Sh128,831) per cubic meter. Simultaneously, the landed cost of diesel experienced a 5.43 percent drop to $826.01 (Sh130,113) from $873.42 (Sh135,939) when considering the October and November exchange rates.
The drop is poised to fortify the government’s endeavors to curb inflation, easing financial burdens on Kenyans, especially those affected by heightened taxation. As a diesel-driven economy, the costs of energy and transport play a substantial role in the inflation calculation for goods and services in Kenya. This decline is expected to permeate through various sectors, providing relief during the upcoming holiday season.
Kenya currently boasts the second most affordable fuel in East Africa, with super petrol priced at $1.38 and diesel at $1.31 per liter. Tanzania claims the title of the most economical fuel, priced at $1.26 and $1.29 per liter for super petrol and diesel, respectively, following the latest review.
Despite the sustained climb in pump prices since October 2021, the implementation of a stabilizing fund to cushion consumers amid a global surge in crude prices, the continued drop in global crude prices hints at local pump prices falling below the Sh200-a-liter mark early next year. This drop can be attributed to the sustained decrease in Murban crude prices, the benchmark used by the Energy and Petroleum Regulatory Authority (EPRA) for its monthly pricing cycles, owing to diminished demand in the US and China and production cuts by the Organization of the Petroleum Exporting Countries (OPEC).