Have you ever asked yourself why fuel prices keep changing?
Energy Petroleum Regulatory Authority (EPRA) checks and regulates fuel prices monthly and the new prices are effective as of the 15th of every month to the 14th of the next month. Over the last few days, the hottest topic in the country is the high fuel price unveiled by EPRA, which is a historic high surpassing the Kshs.130/litre mark. But have you ever asked yourself how this figure is achieved and what is taken into concern before the fuel price is decided? Below is a formula used by EPRA:
Cost of fuel prices = Product cost + Distribution & storage cost + Oil marketing companies cost + Taxes & levies.
Kenyans over the last few days have been wondering why the product cost of fuel when it reaches the port of Mombasa is relatively low yet at the filling station they pay almost double the cost. According, to the latest EPRA review a litre of petrol, diesel and kerosene at the port of Mombasa lands at Sh60.35, Sh53.88 and sh.54.44 respectively. This means that atleast Ksh.74 in petrol, Ksh. 62 in petrol and Kshs. 56 in kerosene goes to taxes. But what are these taxes?
BREAKDOWN OF THE COSTS OF SUPER PETROL, DIESEL AND KEROSENE IN NAIROBI: 15TH SEPTEMBER 2021-14TH OCTOBER 2021.
| COST ITEM | Super Petrol | Diesel | Kerosene | |
| Kshs/litre | Kshs/litre | Kshs/litre | ||
| Product cost(i) | 60.35 | 53.88 | 54.44 | |
| Distribution and Storage (ii) | 3.17 | 2.9 | 2.88 | |
| Oil Marketing Companies(iii) | 12.39 | 12.36 | 12.36 | |
| Excise Duty | Tax | 21.95 | 11.37 | 11.37 |
| Road Maintenance Levy | Levy | 18.00 | 18.00 | 0.00 |
| Petroleum Development levy | Levy | 5.4 | 5.4 | 0.00 |
| Import Declaration Fee | Levy | 2.04 | 1.81 | 1.83 |
| Railway development levy | Levy | 3.48 | 1.04 | 1.05 |
| Value added tax(VAT) | Tax | 9.98 | 8.56 | 8.21 |
| Anti-adulteration levy | Tax | 0.00 | 0.00 | 18.00 |
| Taxes and levies(iv) | 58.81 | 46.46 | 41.14 |
Other levies not included in this table are merchant shipping levy and petroleum regulatory levy.
The product cost of petroleum products is the price at which it arrives at the port of Mombasa. This is why the price of fuel is less in Mombasa than other major towns in Kenya because it doesn’t incur many costs like transport.
PRICES OF FUEL FROM 15th SEPTEMBER – 14TH OCTOBER, 2021.
| TOWN | Super Petrol(Kshs) | Diesel(Kshs) | Kerosene(Kshs) |
| MOMBASA | 132.46 | 113.36 | 108.57 |
| NAIROBI | 134.72 | 115.60 | 110.82 |
| NAKURU | 134.24 | 115.43 | 110.67 |
| ELDORET | 135.13 | 116.31 | 111.54 |
| KISUMU | 135.13 | 116.30 | 111.54 |
The price of petroleum products has increased as of this month 15th September. The changes in the maximum allowed petroleum pump prices in Nairobi are as follows: Super Petrol, Diesel and Kerosene increased by Sh7.58, Sh7.94 and Sh12.97 per litre respectively.
Taxation is the government way of acquiring finances. According to MP Richard Onyonka who also sits in the parliamentary budget committee, the raising of the fuel prices is a way of the government trying to offset the public debts we have gotten ourselves into as a country. “Kenya is faced with the challenges of raising finances for due debt repayments running into billions, the committee was hard at work to come up with sources of revenue to mitigate the same therefore the committee deemed it fit to impose VAT on fuel imports as the only source that the government could raise money from to pay its loans,” said the MP to Citizen TV Daybreak. Unless the government finds a way to curb its expenses, and mitigate the high fuel prices the situation could get tougher because whether you drive or not the high fuel prices will cause the cost of other commodities such as electricity to go up and will hurt small businesses, aggravating the prices of basic goods. It is important to note that fuel prices are inclusive of 8% VAT in line with provisions of the finance act 2018, Tax laws Act 2020 and revised rates for excised duty adjusted for inflation as per legal notice No.194 of 2020.
Petrol Costs Diesel Costs Kerosene Costs Petrol Costs
Petrol charges and prices trends from January to September 2021
Diesel Costs
Diesel charges and prices trends from January to September 2021
Kerosene charges and prices trends from January to September 2021