Energy and Petroleum Regulatory Authority (EPRA) has defended the move to increase fuel prices from October 14, 2022.
Speaking during a stakeholder forum on Monday, August 22, EPRA Director General, Daniel Kiptoo, disclosed that the hike follows a review of Kenya Pipeline Company (KPC) storage and pipeline tariffs.
Besides boosting the company's revenue base, Kiptoo explained that the increase will help the firm maintain its infrastructure and enhance efficiency.
He noted that the review of the tariffs would have a ripple effect on pump prices starting October 14, where the prices will increase by Ksh0.54 per litre in Nairobi, Ksh0.42 per litre in Nakuru and Ksh0.29 per litre in Kisumu.
Currently, a litre of super petrol, diesel and kerosene retail at Ksh159.12, Ksh140.00 and Ksh127.94, respectively in Nairobi.
However, EPRA made it clear that reviewed charges will be applied after conducting public participation and feasibility studies on the repercussion of fuel price hike.
"It is a requirement in law that we subject the proposal to public participation to incorporate the views of members of the public, before the new tariffs are operationalized," Kiptoo stated.
"We then break down the proposal and evaluate the investments they are willing to make. This will include looking at their debt structure, operational expenses and allowable investment."
The review of KPC tariffs under the 2020/2022 period lapsed in June. With the implementation of the new charges, the company intends to construct a new line from Mombasa to Nairobi, to enhance efficiency in the supply of the essential commodity.
It will also push the KPC asset base to grow from Ksh85.9 billion to Ksh104.30 billion, which will help stabilise pump prices in the long run.
Fuel prices remained unchanged in September after President Uhuru Kenyatta issued a Ksh16.7 billion subsidy to cushion Kenyans against the high cost of living.
The fuel prices have been on a steady increase since February 2022, when costs of super petrol, diesel and kerosene were Ksh129.72, Ksh110.60 and Ksh103.54, respectively.
With the price of the commodity increasing, the government has been using subsidies to keep the prices at manageable levels.
