Inflation fears as fuel prices rise by Sh4.12

The Energy Regulatory Commission has announced a Sh4.12 per litre increase in fuel prices, raising fears that the inflation rate could rise yet again this month.

This is second time the regulator has raised fuel prices this year.

Super petrol retail prices have now shot up to a nine-month high of Sh117.69 per litre in Nairobi.

The price of diesel increased by Sh1.17 to Sh107.37 per litre while that of kerosene went up by Sh2.61 to Sh88.54 per litre.

According to a statement from the Energy Regulatory Commission (ERC) Director General Kaburu Mwirichia, the increase was caused by a rise in international fuel prices.

The price of Free On Board Murban crude oil in February was posted at US$ 115.4 per barrel, an increase of 3 per cent from US$ 112.05 per barrel in January 2013.

The average landed cost of imported kerosene increased by 8.15 per cent, super petrol by 5.68 per cent and diesel by 3.38 per cent over the same period.

“Over the same period, the mean monthly US dollar to Kenya shilling exchange rate remained fairly stable at Sh87.31 per dollar in February, compared with Sh87.01 per dollar in January,” Mr Mwirichia said.

In February, the price of super petrol went up by Sh1.97 per litre, diesel by 2.21 per litre and kerosene by Sh2.07. The year-on-year inflation rate also rose for the second month in a row to 4.45 per cent from 3.67 per cent in January after falling for 13 straight months.

The situation could be made worse by declining food supply which could trigger an increase in food prices. Following yesterday’s increase, petrol will retail at Sh114.43 per litre in Mombasa, diesel at Sh104.13 and kerosene at Sh85.74.

In Mandera, the most expensive area, petrol will retail at Sh130.21, diesel at Sh119.89 and kerosene Sh101.06.

The prices are effective until April 14 when new prices will be announced.