Petrol price up as im­port costs rise

Business Daily (Kenya) - - ECONOMY & POLITICS - Neville Otuki no­tuki@ke.na­tion­media.com

Petrol prices have in­creased for the first time since June with the coun­try’s en­ergy reg­u­la­tor cit­ing the ris­ing cost of pe­tro­leum im­ports.

The En­ergy Reg­u­la­tory Com­mis­sion (ERC), which sets max­i­mum retail prices for petrol, diesel and kerosene on the 15th of every month, said the costs of im­port­ing a tonne of petrol had risen 7.48 per cent.

But the reg­u­la­tor de­layed pay­ment of Sh945 mil­lion com­pen­sa­tion to the oil mar­kets that

was ex­pected to start last mid­night, ar­gu­ing it would have hurt homes and busi­nesses in an en­vi­ron­ment of pricey oil.

Petrol, mostly con­sumed by pri­vate cars, will cost Nairobi mo­torists Sh98.30 per litre

from Sh96.08, while diesel is up by a shilling to Sh86.86 in the cap­i­tal.

En­ergy and trans­port costs have a sig­nif­i­cant weight­ing in the bas­ket of goods and ser­vices used to mea­sure in­fla­tion, which

rose to 8.04 per cent last month from 7.47 per cent in July.

The rate rose above the gov­ern­ment’s pre­ferred band of 2.5 to 7.5 per cent ear­lier in the year af­ter a re­gional drought caused prices to surge. The ERC at­trib­uted the costly fuel to higher prices in the global mar­ket.

Petrol users were, how­ever, spared a fur­ther Sh0.69 in­crease per litre that the ERC in­tended to in­clude in the lat­est re­view and stag­gered over six months com­pen­sate oil mar­keters who in­curred costs ear­lier that were not passed on to mo­torists.

“The com­pen­sa­tion will be paid when prices start de­creas­ing in or­der to have less im­pact on con­sumer prices,” the ERC act­ing di­rec­tor-gen­eral Pavel Oimeke said.

REFILL At the pump: City mo­torists will pay Sh98 for a litre of petrol. --FILE

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