The Energy and Petroleum Regulatory Authority (EPRA) has disclosed that it rejected proposals by oil marketers and retailers to hike oil prices, despite the prices dipping internationally.
EPRA added that it rejected a petition by the marketers asking it to base its May prices on March crude oil prices which cost $35.58 (approximately Ksh 3,727) a barrel, rather than $26.63 (approximately Ksh2,769) for April.
The marketers argued that they were unable to offload 40% of the expensive fuel they purchased in March due to stringent Coronavirus restrictions such as the dusk-to-dawn curfew.
The government announces fuel retail prices on the 14th day of every month and books oil one month ahead of purchase as explained by Nicholas Gachara, a financial analyst in Nairobi, Kenya.
"For Kenya, our prices will continue dropping, for the consignment for May and June was booked in April," he stated while speaking with Kenyans.co.ke.
In a report by Business Daily on Wednesday, May 13, Petroleum Principal Secretary Andrew Kamau argued that it was unlawful and illegal to base May prices on March consignment.
"The way fuel pricing is done in Kenya is guided by the law and not at anyone's discretion. If they wanted any change in the approach, they would have to wait until when a new legal notice is being drafted to put in such conditions.
"The formula is even audited and EPRA cannot just change it due to some request from marketers," Kamau stated.
The Standard added that the Consumers Federation of Kenya (Cofek) slammed the petition too and argued that consumers would not accept high and unreasonable fuel prices.
On Thursday, May 14, the government will announce new fuel prices, with further drops being expected.
In April 2020, Super Petrol, Diesel and Kerosene retailed at Ksh92.87, Kshs97.56 and Kshs77.28 respectively in Nairobi as compared to March's prices where they retailed at Ksh 118.27, Ksh 101.65 and Ksh 95.46.
"There is a glut in the market, excess supply and no demand. Airlines consume about 5 million barrels per month and now they are grounded. The law of supply and demand comes in, whereby in excess supply and no demand, prices shoot down. I expect prices to shoot down to around Ksh 90," Gachara stated while speaking with Kenyans.co.ke. on April 21.
