Kenyans, this morning, woke up to reduced fuel prices following the Energy Regulatory Commission (ERC) latest fuel price review. A liter of super petrol, in Nairobi now retails at KES 112.61 from KES 113.68, diesel retails at KES 105.79 from KES 105.85. The retails price of kerosene though rose to KES 86.44 from KES 84.87, a rise attributed to inefficiencies of local refinery.
Drop in super petrol and diesel prices is attributed to decrease in international oil prices. The Free On Board (FOB) price of Murban crude oil lifted in November 2012 was posted at USD 112.10 per barrel, reflecting a 0.97 percent decrease from USD 113.20 per barrel in October 2012.
The average landed cost of imported super petrol decreased by 3.80 percent to retail at USD 1074.16 per tonne in November 2012 from USD 1116.60 per tonne in October 2012. Over the same period the average landed cost of imported diesel decreased by 1.00 percent to stand at USD 1008.49 per tonne in November 2012 from USD 1018.69 per tonne in October 2012. The average landed cost of imported kerosene dropped to USD 1076.55 per tonne for USD 1101.79 per tonne over the same period.
With the exception of Kerosene prices, local fuel prices could have dropped further if only the mean monthly exchange rate had not deteriorated. The monthly exchange for November 2012 was posted at KES 85.67 to the dollar from KES 85.19 to the dollar in October 2012.
Taking into account the actual costs of imported products refined locally, the overall result was a drop in fuel prices.