Thursday March 16, 2023 – The Government of President William Ruto sought to explain why it increased the prices of petrol despite a decline in landing cost.
In a statement to Kenyans, the Energy and Petroleum Regulatory Authority (EPRA) noted that increasing Super Petrol prices by Ksh2 was subject to the dominance of the US dollar against the Kenyan shilling.
The authority noted a drop of 0.06 per cent in the landing cost of imported petrol. Landing costs are usually calculated in dollars.
The landing cost for Super petrol in January was Ksh85,750.11 (US 659.87) per cubic metre, while that of February was at Ksh85,698.13 (USD 659.47).
However, in the same period, the dollar in January averaged Ksh130.64, while in February, it was sold at Ksh133.98.
Despite the drop in the prices in US dollars, the prices in Kenyan shillings increased.
“The prices are inclusive of the 8 per cent Value Added Tax (VAT) in line with the provisions of the Finance Act 2018, the Tax Laws (Amendment) Act 2020 and the revised rates for excise duty adjusted for inflation as per Legal Notice No. 194 of 2020.
“Over the same period, the mean monthly US dollar to Kenya Shilling exchange rate depreciated by 2.56 per cent from Ksh130.64 per dollar in January 2023 to Ksh133.98 per US dollar in February 2023,” read the statement in part.
Therefore, the move prompted the Government to subsidise the price of petrol to cushion the consumers from what would have been high prices.
“Prices of diesel have been cross-subsidized with that of Super petrol while a subsidy of Ksh23.49 per litre has been maintained for Kerosene to cushion consumers from the otherwise high prices,” read the statement read in part.
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