Fuel price in Kenya has surpassed the Ksh 200 ($1.36) mark. According to Business Insider Africa, the increase can be attributed to global upward reviews of petroleum products, and the increased landed costs. President William Ruto announced a shift to electric motorbikes to combat rising fuel costs and environmental concerns.
According to the Energy and Petroleum Regulatory Authority (EPRA), fuel prices in Kenya could increase by KSh 10 ($0.07) monthly until February 2024. This is due to the rising global oil prices and the weakening Kenyan shilling.
This information was disclosed by Moses Kuria, the Cabinet Secretary for the Ministry of Investments, Trade & Industry of the Republic of Kenya, on his X (former Twitter) page. The Minister urged Kenyans to brace themselves in preparation for the increasing fuel cost.
The current price of Super Petrol in Nairobi is Kshs. 159.12 per litre. If the monthly increases are implemented, the price of Super Petrol will be:
· Kshs. 169.12 in October 2023
· Kshs. 179.12 in November 2023
· Kshs. 189.12 in December 2023
· Kshs. 199.12 in January 2024
· Kshs. 209.12 in February 2024
The increase in fuel prices will have a significant impact on Kenyans, who are already struggling with the rising cost of living. It will make transportation, food, and other essential goods more expensive. The government is under pressure to provide relief to Kenyans, but it is unclear what measures it will take.
The monthly increase of KSh 10 is based on the current fuel prices and the expected oil price volatility. The actual increase in fuel prices could be higher or lower, depending on the global oil market conditions. There are some important factors that could affect fuel prices in Kenya.
First, the global oil prices. Indeed, the price of oil is determined by a number of factors, including supply and demand, global economic conditions, and geopolitical events. If global oil prices continue to rise, the fuel prices in Kenya will also increase.
Second, the exchange rate between the Kenyan shilling and the U.S. dollar. The Kenyan shilling has been weakening against the US dollar in recent months. This means that it takes more Kenyan shillings to buy a US dollar, which makes imported goods, including fuel, more expensive.
Third, the government’s taxes and levies on fuel. It must be said that the government taxes fuel heavily. These taxes make up a significant portion of the final price of fuel. If the government increases these taxes, the fuel prices will also increase.
The rising fuel prices are a major concern for Kenyans. They are already struggling with the rising cost of living, and the increase in fuel prices will make things even more difficult.
While many have called for the Kenyan government to intervene in order to reduce the price of fuel, there are better approaches to address the issue. Government intervention will only distort the fuel market. What the Kenyan government can do is to apply a set of market-based policies to reduce price of fuel.
The first approach would be to increase competition in the fuel market. This can be done by opening up the market to more players, such as independent fuel retailers. This would help to drive down prices as businesses compete for customers.
The second approach would be to promote fuel efficiency. This can be done through education and awareness campaigns, as well as by providing incentives for people to buy fuel-efficient vehicles. This would help to reduce the demand for fuel, which would put downward pressure on prices.
The third approach would be to invest in alternative fuel. This would help to reduce the country's reliance on oil, which would make fuel prices less volatile. Alternative fuels, such as solar and wind power, are becoming more affordable and efficient, and there is a growing demand for them.
These are just a few of the market-based measures that the Kenyan government could take to reduce fuel prices. The best approach will depend on the specific circumstances of the country. However, it is clear that market-based measures can play an important role in reducing fuel prices and making them more affordable for Kenyans.