Written by David Indeje
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The current price of fuel at the National Oil Pumb station in Bungoma before the September increase in price. [PHOTO | David Indeje | West Fm]
The Energy Regulatory Commission –ERC in a surprise move after a continued down ward tread of lowering the pump prices of petrol, kerosene and diesel Friday it increased the price of fuel citing an increase in international crude oil costs.
“There has been an upward trend in the price of Crude and refined petroleum products in the international market,” read the statement.
In a statement released on Friday evening, fuel price increased by Sh 2.47 to retail at Sh108.95 per litre. for petrol; diesel up by Sh3.99 to Sh101.07; kerosene up by Sh5.68 to Sh79.65 beginning Saturday.
This means in Western Kenya, fuel will retail at: kerosene Sh 81.08, diesel Sh 103.72, super Sh111.37 beginning Saturday.
According to the ERC Director General Kaburu Mwirichia, “The average landed cost of imported Super Petrol increased by 2.76percent, from $ 997.52 per tonne in July 2012 to $1025.05 per tonne in August 2012.Over the same period the average landed cost of imported Diesel increased by 6.90 percent from $ 933.35 per tonne to $997.78, while the average cost of imported kerosene increased by 10.19 percent from $928.33per tonne in July 2012 to 1022.89 in August 2012.”
Fuel price dropped in August as compared to July. In July the ERC cut the price of Sh9.21 per litre for super, Sh11.70 for regular and Sh8.08 for Diesel.
The board attributed this to lower crude oil prices then, the price of Murban crude oil had dropped by 12% since January 2011 when a barrel retailed at US$ 95.55 per barrel. However, beginning, July international crude oil prices have risen by close to $10 a barrel (159 litres) to $111.65.
With the new prices, consumers will be obliged to brace up more despite having a slowdown in the inflation rate as per August which was 6.09 per cent compared to July’s which was 7.74 per cent.
Subsequently, the new price received objection from the Consumers Federation Kenya (Cofek) which said, “The latest fuel prices threatens a higher inflation since the electricity component of fuel adjustment charge is likely to further shoot up in the month of October.”
Adding that, “Banks could as well use the latest development as a signal to hold back their overdue reductions in the respective base lending rates although a few have already lowered it.”
This is after the Central Bank of Kenya (CBK), through its Monetary Policy Committee, decided to lower the rate by 350 basis points at which it lends to commercial banks at 13.0 per cent this month.
A move that saw most banks reciprocates by affecting the same by lowering their lending rate with most coming into effect beginning next month to 15th.
Standard Chartered Bank of Kenya has slashed its base lending rates by 3 percentage points to have it at 18.5% down from 21.5%.
Barclays Bank, KCB Bank and CFC Stanbic who have lowered to 19%.
Other banks who have done the same include: Ecobank who have cut their rates to 21.5% down from 25%, Diamond Trust Bank lowered to19% from 22.5%,Commercial Bank of Africa lowered to 19.
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