Kenyans woke up to reduced fuel prices following the latest fuel price review released yesterday by the Energy Regulatory Commission (ERC).

Mombasa residents will enjoy the lowest fuel prices in the country as a litre of super petrol, diesel and kerosene will retail at KES 108.34, KES 100.76 and KES 81.07 respectively while Mandera residents will spend the most for a liter of fuel. Super petrol, diesel and kerosene will retail at KES 124.12,, KES 116.56 and KES 96.38 respectively in Mandera.

In Nairobi super petrol will retail at KES 111.60 from KES 112.61, diesel will retail at KES 103.99 from KES 105.79 while kerosene will retail at KES 83.86 from KES 86.44.

Click here for fuel pump prices in different parts of the country.

The energy regulator, ERC, attributes this drop in fuel prices to drop in international oil prices. The Free On Board (FOB) price of Murban crude oil lifted in December 2012 was posted at USD 110.75 per barrel, reflecting a marginal decrease of 1.20 percent from USD 112.10 per barrel in November 2012.

The average landed cost of imported diesel decreased by 3.71 percent to retail at USD 971.04 per tonne in December 2012 from USD 1008.49 per tonne in November. Over the same period the average landed cost of imported kerosene decreased to USD 1043.15 per tonne in December 2012 from USD 1076.55 per tonne in November 2012. The average landed cost of super petrol decreased by 2.78 percent to retail at USD 1044.25 per tonne in December 2012, from USD 1074.16 per tonne in November 2012.

Local fuel pump prices could have dropped further is only the mean monthly exchange rate had not deteriorated. In December 2012 the shilling exchanged at the rate of KES 86.00 to the US dollar, from KES 85.67 to the US dollar recorded in November 2012.

Taking into account the actual costs of imported products and products refined locally, the overall result was a drop in local fuel prices.