Energy and Petroleum Regulatory Authority (EPRA) Director General Daniel Kiptoo has addressed concerns over the cheaper fuel costs in neighbouring countries amidst fears that Kenya will increase fuel prices to a historic high on November 4.
While appearing before the National Assembly Energy Committee on Tuesday, Kiptoo attributed the discrepancy in high fuel prices in Kenya and Tanzania to two factors.
The DG cited that the exchange rate and the pricing model as the factors causing the stark differences in prices.
According to the DG, the Kenya shilling has lost some dominance over the Tanzania shilling in recent months.
The dollar, on the other hand, had gained dominance over the Kenyan shilling for the better part of the year. Currently, a dollar is retailing at Ksh151.40.
"We have lost 13 per cent of the Kenyan shilling to the Tanzanian shilling. As we convert that landed cost to the Kenya shilling, the biggest factor is the exchange rate. Even as we compare those Tanzanian numbers, we need to compare apples to apples," he stated.
On the other hand, the EPRA boss indicated that Tanzania uses a different process model that was based on economic factors dating to two months.
Conversely, Kenyans factor in the economic factors of the preceding month.
Energy Cabinet Secretary Davis Chirchir added that the taxes imposed on fuel products in Kenya could not be compared to those of the neighbouring countries.
Therefore, the CS intimated that the prices in Kenya would reduce if the whole sector is looked at holistically.
"Kenya has the lowest F&B premiums compared to Uganda and Tanzania. However, our taxes and levies make the product more costlier," he stated.
In the latest review by Tanzania's Energy and Water Utilities Regulatory Authority (EWURA), a litre of Super Petrol was reduced from Ksh198.04 to Ksh197.62. In Kenya, a similar quantity is being sold at Ksh217.36 after an increase of KshKsh5.72.
Diesel in Tanzania was set at Ksh 203.65. A similar amount in Kenya goes for Ksh205.47.
However, prices in Kenya could go up after CS Chirchir intimated that the prices could soon hit the Ksh300 mark owing to global factors, including the Israel-Hamas conflict.
