Kenyans should prepare for an increase in fuel prices as the Energy and Petroleum Regulatory Authority (EPRA) moves to implement a revised petroleum pricing framework. The adjustments, set to take effect in the coming months, will see pump prices rise by as much as Sh7.80 per litre, affecting super petrol, diesel, and kerosene.
The price hikes are driven by increased compensation for oil marketing companies (OMCs) and transporters, a move EPRA says reflects the changing business dynamics in the fuel sector.
Breakdown of the Price Increase
The adjustments will impact the three key petroleum products regulated by EPRA as follows:
- Super petrol will increase by Sh7.80 per litre
- Diesel will go up by Sh7.75 per litre
- Kerosene will rise by Sh7.67 per litre
A key component of the price hike is the Sh7.12 increase in the margin for OMCs, raising their earnings to Sh19.51 per litre of super petrol, up from the current Sh12.39 per litre. Additionally, the cost of transporting fuel will rise by Sh0.64 per litre, increasing transporters’ margins to Sh1.15 per litre from Sh0.54, for supplies within 40 kilometers of Nairobi. Transport costs to other regions will vary depending on the distance from the depots.
This marks the first time in 14 years that margins for oil marketers and transporters have been revised under the government-regulated pricing framework.
Justification and Implementation Timeline
EPRA Director-General Daniel Kiptoo explained that the price adjustments would be phased in gradually to prevent a sudden surge in pump prices. The rollout will be timed to align with a drop in global fuel prices to cushion consumers from excessive financial strain.
“The last time EPRA set a transporters’ price was in 2010. If you own a truck and have signed a contract with an oil marketer, the OMC can only compensate you based on what EPRA has approved,” Kiptoo stated.
The pricing formula changes stem from recommendations in the Cost of Service Study in the Supply of Petroleum Products, which EPRA commissioned in December 2023. The study included public participation and stakeholder engagement before finalizing the proposals.
Upcoming Fuel Price Announcement
EPRA is set to release the maximum fuel prices for the March–April pricing cycle tomorrow. Kiptoo indicated that the regulator is still analyzing data to determine whether to begin implementing the higher margins.
“We are keen to ensure this does not adversely affect consumers while also compensating investors,” he said.
Kiptoo emphasized that the new margins are not just about profits but also cover the operational costs of OMCs, including staff salaries, electricity, and investments required to meet licensing standards.
With international fuel prices on a downward trend, EPRA sees an opportunity to introduce the new pricing model without imposing an excessive burden on consumers. However, Kenyans remain watchful, as any price increase could drive up transportation and overall living costs.
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