Kenyans, this morning, woke up to reduced fuel prices following the Energy Regulatory Commission latest fuel price review. The price of a liter of super petrol, in Nairobi, dropped to KES 113.68 from KES 115.26, diesel dropped to KES 105.85 from KES 106.11 and kerosene dropped to KES 84.87 from KES 86.01.

This drop in fuel prices is attributed to decrease in international oil prices. The Free On Board (FOB) price of Murban crude oil lifted in October 2012 was posted at USD 113.20 per barrel, reflecting a 2.03 percent decrease from USD 115.54 per barrel in September 2012.

The average landed cost of imported super petrol decreased by 2.78 to retail at USD 1116.60 per tonne in October 2012 from USD 1148.54 in September 2012. Over the same period the average landed cost of imported diesel decreased by 2.96 percent to stand at USD 1018.69 per tonne in October 2012 from USD 1049 per tonne in September 2012.  The average landed cost of imported kerosene dropped to USD 1101.79 per tonne for USD 1111.24 per tonne over the same period.

Local fuel prices could have dropped further if only the mean monthly exchange rate had not deteriorated marginally by 0.58 percent. The monthly exchange for October 2012 was posted at KES 85.19 to the dollar from KES 84.70 to the dollar in September 2012.

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