Pump prices have remained unchanged for the first time this year, ending months of successive price cuts that consumers have enjoyed since December last year.
The Energy and Petroleum Regulatory Authority (Epra) kept pump prices for a litre of petrol and diesel unchanged at Sh188.84 and Sh171.60 respectively in Nairobi.
This was despite the strengthening of the shilling against the dollar, with Epra using an exchange rate of 130.83 units to the dollar compared to 129.06 units last month.
The landed cost of petrol fell marginally by 1.06 percent to $708.47 per tonne while that of diesel rose by 1.62 percent to $693.82 for the same quantity.
Kenyans have enjoyed successive fuel price cuts since December last year, significantly easing inflationary pressures on the economy.
“In the period under review, the maximum allowed petroleum pump prices for petrol, diesel and kerosene remain unchanged,” Daniel Kiptoo, the Director General of Epra said on Wednesday evening in the gazetted pricing schedule.
The strengthening of the shilling against the dollar since February and a slowdown in global demand for fuel since the end of last year have been key factors in the steady decline in local pump prices over the past seven months.
The energy regulator, however, maintained VAT at 16 percent as contained in the now annulled Finance Act 2023.
Mr Kiptoo had said last month that Epra was awaiting advice from the Attorney General before deciding whether to reduce the VAT rate to eight percent.
Fuel prices are critical in determining the cost of services and goods in the Kenyan economy, highlighting why reducing the VAT rate to eight percent is critical in easing the burden on Kenyans.
Inflation eased to 4.3 percent last month from 4.6 percent in June, remaining within the government’s preferred target range.
It remains to be seen how the unchanged prices will affect consumption, as demand has been falling since the beginning of the year.
Consumption of petrol and diesel fell despite falling prices for the two fuels, pointing to economically depressed consumers cutting costs as spending power diminishes.
Petrol consumption fell 2.9 percent to 986.2 million litres in the six months to June this year from 1.01 billion litres in the same period last year, while diesel consumption fell 2.5 percent to 1.27 billion litres from 1.31 billion litres.
