Fuel Prices – Status Quo Remains
Yesterday, the Energy and Petroleum Regulatory Authority (EPRA) announced the fuel prices for the period between 15th April to 14th May 2021.
According to the news that had been going around including a front page headline from Business Daily , we expected the fuel prices to go up, and with a significant jump especially on Super Petrol. The anticipated change was ksh. 4.30 for petrol and ksh. 2.30.
This however did not happen as EPRA announced a status quo (prices remain the same for the next 30 days).
While this was welcomed especially by the consumer, things are not as rosy for the retailers. The reason is, though the fuel price remained the same, from the breakdown given by the regulator, cost prices actually went up. There was a 9.27% , 4.77% , 7.29% upward change on petrol, diesel and kerosene respectively.
According to the law, these costs should have been passed to the consumer. But they have not. Begging the question as to who would bear them.
Another interesting fact to note in the press release given was that it was silent on the maximum wholesale fuel price, which is always put in place to protect the retailers against price exploitation from Oil Marketing Companies (OMCs).
This means, while it will be a crime to sell beyond the stipulated pump prices, a retailer has no such protection from his supplier during this period. The resultant is a further squeeze on the retail margins guaranteed in the price build up for the retailer further exacerbating the already fragile operating environment for the especially small players.
It is only right for the government to extend to retailers the same loss compensation given to OMCs.
These views are my own.
#petroleumindustry #petroleum #fuelPrices #Kenya