Kenya Raises Fuel Prices as Middle East War Lifts Import Costs

Kenya raised maximum fuel prices from midnight on Thursday, in a monthly review that puts the Middle East war straight onto the price board at every pump in the country.

In Nairobi, super petrol rose by 12.93 shillings to 226.96 shillings a litre, up 6 percent. Diesel rose by 9.90 shillings to 227.76 shillings, up 4.5 percent. Kerosene rose by 28.49 shillings to 219.87 shillings, a jump of 14.9 percent. The new ceilings run from Oct 15 to Nov 14, the Energy and Petroleum Regulatory Authority, EPRA, said.

In Mombasa, the port city where fuel enters the country, petrol costs 223.81 shillings a litre, diesel 224.61 and kerosene 216.71.

Why the jump landed now

EPRA sets prices from the cost of imported refined fuel, and that cost surged between August and September. The landed cost of super petrol rose 11.81 percent, from 874.26 dollars per cubic metre to 977.55 dollars. Diesel rose 11.32 percent to 1,065.38 dollars, and kerosene rose 9.41 percent to 1,098.31 dollars. The shilling was steady, at about 129.91 to the dollar in September, so currency did not cushion the rise.

Kenya relies on the Middle East for nearly all of its fuel supply, Reuters noted. EPRA's director general told reporters on Oct 14 that September was the worst month since the war began, with petrol reaching 1,300 dollars a metric tonne, up from 600 dollars at the start. Prices were left unchanged in the previous monthly review, which held the increase back by a month and then delivered it at once.

The cushion and the squeeze

The government kept value added tax on fuel at a reduced 8 percent, half the standard 16 percent, and extended that cut until Jan 14. Without it, the pump numbers would be higher.

Kerosene is the hard part of this review. Many low income households use it for cooking and light, and it took the largest rise in both shillings and percent. EPRA said narrowing the gap between kerosene and motor fuels also discourages adulteration, where cheap kerosene is mixed into diesel and sold on, a practice that damages engines and hits the matatu minibus sector.

What it hits next

Fuel prices feed into transport fares, farm costs and construction within days in Kenya. Diesel moves food from farms to city markets, and petrol moves the matatus most Nairobi workers ride. Thursday's review is dated to Nov 14, when EPRA will price the next month off October's import costs. If the war keeps landed costs where September put them, there is no relief in that review either.