The Energy Regulatory Commission (ERC) is today, expected to announce reviewed fuel prices for the period starting 15 January 2013 to 14 February 2013.

Here’s what you should expect to see happening.

As posted by Abu Dhabi National Oil Company, the Free On Board (FOB) price of Murban crude oil lifted in the month of December 2012 was posted at USD 110.75 per barrel, reflecting a marginal decrease of 1.2 percent from USD 112.10 per barrel in October 2012.

International crude oil prices have been on a downward trend over the past three months, from a USD 115.40 per barrel high in September 2012 to the lasts low of USD 110.75 per barrel in December 2012. This observed drop in international oil prices has seen local fuel prices drop.

Data from Central Bank of Kenya (CBK) also show that the shilling depreciated in December 2012 as compared to November 2012. From our calculations, the mean exchange rate for the month of December 2012 is KES 85.99 per US dollar from an average of KES 85.67 per US dollar recorded in November 2012. This reflects 0.37 percent depreciation.

The mean exchange rate has been depreciating over the past four months from a KES 84.06 per US Dollar in August 2012 to the latest KES 85.99 per US Dollar in recorded in December 2012.

Based on the above price movement, our calculations showed that the price of super petrol will drop to KES 111.67, diesel to KES 104.91 and kerosene to KES 83.81.

Our calculations are based on the relationship between the price of crude oil in the international market, the strength of the shilling against major currencies and the prices set by ERC over the past 12 months. It is important to note; we took the assumption that costs associated with refining, production, transportation and prevailing taxes remained constant.

Our projected pump prices are for Nairobi.  The energy regulator (ERC) will post the exact fuel prices later on in the day.

As it currently stands, super petrol retails for KES 112.61 in Nairobi, Diesel at KES 105.79 and Kerosene at KES 86.44.

*Our calculations are subject to an deviation of + or – KES 3.