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In a statement released on March 14, EPRA said that the price of super petrol, diesel and kerosene has decreased by Sh7.21 per litre, Sh5.09 per litre and Sh4.49 per litre respectively.
This brings the maximum price of super, diesel and kerosene in Nairobi is Sh199.15, Sh190.38, and Sh188.74 respectively.
The new prices come into effect at midnight and shall lapse on April 14, at midnight.
The average landed cost of imported super petrol increased by 5.60%, diesel decreased by 0.76% and kerosene increased by 1.65%.
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Several factors contributing to fuel prices
The cost of crude oil
The cost of crude oil is the largest component of the retail price of gasoline, and it varies over time and across regions of the country.
Many factors affect crude oil prices, including political instability or conflict in oil-producing countries, supply and demand, and production cuts by oil-producing countries.
Refining costs and profits
Refining costs and profits are the second-largest component of the retail price of fuel.
Refiners charge more for higher-octane fuel, and premium-grade petrol is the most expensive.
Distribution and marketing costs and profits
Distribution and marketing costs and profits are the third-largest component of the retail price of fuel.
These costs include the costs of transporting fuel from refineries to terminals and then to gas stations, as well as the costs of operating and maintaining gas stations.
Taxes
Taxes are the fourth-largest component of the retail price of fuel. In Kenya, fuel is subjected to nine types of taxes accounting for more than 50% of the cost.
The nine taxes imposed on Kenya's fuel include;
- Excise tax
- 18% VAT
- Road maintenance levy
- Petroleum development levy
- Import declaration fee
- Petroleum regulatory levy
- Railway development levy
- Anti-adulteration levy
- Merchant shipping levy
Overseas conflict
The price of oil may also be affected by political instability or conflict in oil-producing countries.
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Financial practices of oil companies
In periods of economic volatility, oil companies often advise their firms to reduce spending on new production.
This saves cash for emergencies and inflates the price of oil by restricting supply, which increases profit.