Transport operators and farmers will continue bearing the brunt of rising fuel costs after the price of diesel jumped the most for two months in a row.
Diesel, which fuels buses, trucks and farming tractors, is up by the biggest margin of Sh1.17 to Sh90.44 in Nairobi, after hitting a two-year high last month.
Petrol, mostly consumed by private cars, will from Wednesday cost Nairobi motorists Sh0.78 more at Sh101.05 a litre.
The prices will be in place until mid-next month when they will be due for a review again.
The higher costs look set to erode the purchasing power of motorists, push up operating costs for transporters and farmers, who could then pass the additional costs on to consumers, triggering a wave of inflation.The Energy Regulatory Commission (ERC), which adjusts fuel prices every month, said the new prices were driven by the fact that the consignment to be consumed this month was bought when global oil prices had increased.
“The price increases were largely on account of higher international oil prices,” said ERC acting director-general Pavel Oimeke.
Kenya relies on imported petroleum products after it shut down the Mombasa-based refinery in September 2013.
There is a lag of between 30 and 45 days between the placement of import supply orders and actual delivery of consignments at the Mombasa port, meaning local prices do not immediately reflect global market trends.Kerosene, used mainly by poor homes, is up Sh0.77 a litre to Sh67.96 in the capital city.
The rally in the fuel prices is expected to put upward pressure on Kenya’s economy where inflation rate hit a four-year high of 9.04 per cent last month driven by higher fuel and food costs.
A petrol station. Photo courtesy