Webuye residents queu for fuel after an acute shortage that was experienced in the past month. [PHOTO | File]

The Energy Regulatory Commission –ERC continued with its down ward tread by  lowering  the pump prices of petrol, kerosene and diesel citing lower international crude oil costs.

In a statement released on Saturday, the ERC cut the price of Sh9.21 per litre for super, Sh11.70 for regular and Sh8.08 for Diesel.

This means the fuel for Super will retail at Ksh108.40, Regular Petrol Ksh 105.76, Diesel Ksh97.50 and Kerosene Ksh 74.4 per liter respectively.

The board attributed this to lower crude oil prices. This month the price of Murban crude oil dropped by 12% since January 2011 when a barrel retailed at US$ 95.55 per barrel.

Statistics from the   Abu Dhabi National Oil Company show that the Free On Board (FOB) Price of Murban crude oil lifted in June 2012 was posted at USD 97.35 per barrel, down from USD 110.60 per barrel in May 2012.

As per the latest Monetary Policy Committee press release, the average exchange rate fluctuated within a narrow range of between KES 84.79 and KES 86.12 against the US dollar in June 2012 as compared with a range of between KES 83.27 and KES 86.83 in May 2012.

Last month, the fuel price review saw the price of super petrol decrease by Ksh 3.46, from Ksh 121.13 to Ksh 117.67, diesel decreased by 2.93, from Ksh 108.44 to Ksh 105.51 while that of kerosene decreased by Ksh 3.80, from Ksh 87 to Ksh 83.20. 

The new prices come into effect on June 15 and stay in force for a month.

Subsequently, the Monetary Policy meeting on July 5th decided to lower the rate by 150 basis points at which it lends to commercial banks at 16.5 per cent.

This is the first time since December last year the committee has made a change which had been maintained at 18 per cent the Central Bank Rate (CBR) since beginning of this year.

According to the CBK, “Monetary policy guards against inflation and ensures stability of prices, interest rates and exchange rates. This protects the purchasing power of the Kenya shilling and promotes savings, investment and economic growth.’

Though cost of living has been on a decline since January this year, with Junes’ inflation rate coming down to 10.05 per cent from 12.22 the month of May,  the committee said, “measures of inflation declined in June 2012 indicating easing inflationary pressure and a return to price stability. The overall month-on-month inflation declined from 12.22 percent in May 2012 to 10.05 percent in June 2012 mainly arising from a reduction in food and fuel prices.”