Questions have emerged over the controversial price modeling system that the Energy and Petroleum Regulatory Authority (EPRA) has bern using to set fuel prices in the country.
Despite crude oil prices going down with big margins, in Kenya, fuel prices have only reduced by a minor margin. This is being largely attributed to higher taxes that have been slapped on fuel by the current government and the usage of commercial bank dollar rates instead of the CBK rates by EPRA.
According to data analyst Elijah Karichu Samwel, some Sh. 2.2 billion has been getting lost since September 2022 when EPRA started using commercial bank rates instead of CBK dollar rates. On his social media platform, Samwel gave a breakdown of how this difference has been costly. Here is what he said;
“The fuel prices adjustments for the next month have been published, now sit back and enjoy the below:
1). EPRA in the currently estimating used an average USD to KES exchange rate of 157.52; which was 5.49 KES higher than the 152.03 KES posted by CBK as the monthly average
2). Now, in the 15 Months leading to August 2022 Election, the average difference between EPRA Rate and the CBK Posted Rate for the USD to KES was just 0.34 KES
3). That is to say (for example), in September 2021, EPRA used an exchange rate of 110.21 KES and the CBK average for the month was 110.15 KES, or in January 2022, the EPRA used a rate of 113.58 while the CBK average was 113.38
4). I hope you are not lost by the average? Simply, the rate used by EPRA to calculate the cost of fuel from USD was nearly the same as the CBK posted rates. But come the month of September 2022; and the situation changes dramatically
5). Since September 2022 to date, the difference between the rate used by EPRA and the CBK average has grown 15-fold
6). That is, on average, in the past 15 months, this average currently stands as 5.39 KES up from an average of 0.34 KES prior! Wow.
7). Actually, in some months like March 2023, the difference hit a high of 9.9 KES between EPRA and CBK Average
Ehe, this average might seem negligible! Isn’t it? Okay! Let’s see
8). Assuming that the difference between EPRA and CBK rates remains similar to the average of say 0.34 KES as before August 2022; then, the prices of petrol, kerosene and diesel would be nearly 5 KES cheaper today Not much though! Think this way now!
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9). Annually, the consumption of Petrol and Diesel is estimated as 4.9 Billion Liters in the country, which is a monthly average of 408 Million Liters
10). So, the unexplained massive difference between the EPRA and CBK Rate of 5.39 KES per liter would thus translate to a monthly total of 2.2 Billion KES
11). This also translates to about an annual total of 26.4 Billion KES, and a total of 31 Billion in the past 14 months.”