In response to recent reports suggesting that fuel prices may skyrocket to historic levels of Sh. 300 per litre, EPRA Director General Daniel Kiptoo has addressed the growing concerns regarding the high cost of fuel in Kenya.

This was done in comparison to neighbouring countries like Tanzania and Uganda. The DG appeared before the National Assembly Energy Committee and attributed the rising cost of Kenyan fuel to two major factors.

Daniel Kiptoo argued that the exchange rate and the differing pricing models played a huge role in the prices of fuel in different countries.

Using Tanzania as an example, he explained that the Kenyan Shilling had lost 13% of its value to the Tanzanian shilling, despite still being dominant.

On the other hand, the US Dollar has gained tremendously against the Kenyan shilling since last year. 1 USD is now equal to roughly Sh. 151.65 while 1 Ksh. is equal to 16.44 Tsh.

“We have lost 13% of the Kenyan shilling to the Tanzanian shilling. As we convert that landed cost to the Kenya shilling, the biggest factor is the exchange rate. Even as we compare those Tanzanian numbers, we need to compare apples to apples,” the Director General commented.

Secondly, Daniel Kiptoo explained to the committee that Tanzania used different pricing models as compared to Kenya’s pricing model.

In Tanzania, they consider economic factors dating two months while in Kenya, we consider only the previous month’s economic state.

Energy CS Davis Chirchir mentioned that the amount of taxes imposed on fuel in neighbouring countries is incomparable. He implied that fuel prices in Kenya would decrease if the entire sector is examined holistically.

“Kenya has the lowest F&B premiums compared to Uganda and Tanzania. However, the taxes and levies make the product more costlier,” he stated.

On a global scale, fuel prices have decreased marginally in the past month, largely owing to the Israel-Hamas war, as demand for oil decreased especially in Europe. Tanzania’s fuel prices decreased as they were informed by global changes.

CS Chirchir: Fuel costs could reach 300 per litre because of Hamas

The recent review by Tanzania’s Energy and Water Utilities Authority (EWURA) saw a litre of Petrol decrease to Sh. 197.62 from Sh. 198.04. In Kenya, Petrol is going for Sh. 217.36.

Diesel in Tanzania retails at Sh. 203.65 while in Kenya it goes for Sh. 205.47.

Many Kenyans were left questioning the metrics used by the government to price fuel after the Energy CS announced on Monday 6th that fuel prices would shoot up to Sh. 300 per litre.

He pointed out that this would be a result of global factors such as the Israel-Hamas war.

“I read an article in the Financial Times the other day that because of the Hamas and Israeli war, the international prices could go up to USD150 and that would literally mean our products going to a high of Sh. 300 at the pump,” said CS Chirchir.

His statement dampened any hopes Kenyans held for the government lowering fuel prices and easing the cost of living.