Why Kenyan Fuel Costs So Much More Than Tanzania: EPRA DG Kiptoo’s Revelation
Daniel Kiptoo, director general of the Energy and Petroleum Regulatory Authority (EPRA), has addressed apprehensions regarding the lower cost of fuel in neighboring countries in the midst of fears that Kenya will set an all-time high for fuel prices on November 4.
Kiptoo, during his Tuesday appearance before the Energy Committee of the National Assembly, cited two factors as the cause of the disparity between Kenya and Tanzania in terms of high petroleum prices.
The exchange rate and the pricing mechanism, according to the DG, are the primary causes of the substantial price variations.
In recent months, the Kenya shilling has experienced a decline in its dominance over the Tanzania shilling, as reported by the DG.
In contrast, the Kenyan shilling had been undervalued relative to the dollar for the majority of the year. At the moment, the face value of one dollar is Ksh151.40.
“We have lost 13 percent 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,” he stated.
However, according to the EPRA director, Tanzania employs an alternative process model that is predicated on economic factors spanning a period of two months.
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On the contrary, Kenyans apply the economic variables that were present in the previous month.
Energy Cabinet Secretary Davis Chirchir further stated that the tariffs levied on fuel products in Kenya are incomparable to those levied on fuel products in neighboring nations.
As a result, the CS implied that prices in Kenya would decrease if the sector as a whole were examined holistically.
“Kenya has the lowest F&B premiums compared to Uganda and Tanzania. However, our taxes and levies make the product more costlier,” he stated.
Tanzania’s Energy and Water Utilities Regulatory Authority (EWURA) reduced the price of a liter of Super Petrol from Ksh198.04 to Ksh197.62 in its most recent review. A comparable quantity is currently being sold in Kenya for Ksh217.36, reflecting a KshKsh5.72 increase.
Diesel was priced at Ksh 203.65 in Tanzania. An equivalent sum in Kenya is valued at Ksh205.47.
Nevertheless, prices in Kenya may increase in the wake of CS Chirchir’s indication that they may soon surpass Ksh300 due to global factors such as the Israel-Hamas conflict.
Why Kenyan Fuel Costs So Much More Than Tanzania: EPRA DG Kiptoo’s Revelation
