Fuel prices

Kenyans have to dig deeper into their pockets to access all fuels that include cooking gas, charcoal, petrol, kerosene and electricity as energy inflation rises in the East African nation.

Prices of the fuels have taken an upwards trend for the last one month putting pressure on families that were having relief as overall inflation declines.

The country’s inflation in November declined to 4.73 percent from 5.72 percent recorded last month due to favourable weather conditions that led to drop in prices of food items, according to the Kenya National Bureau of Statistics (KNBS).

The decline marked a 54-month low for the cost of living index, which last stood at such lows in May 2013, where it was recorded at 4.05 percent.

However, as the food prices declined, the cost of various fuels went up rising by up to 7 percent between October and November and between 4 percent and 21 percent in the last one year, KNBS data showed.

The worst hit are electricity and kerosene prices which climbed up during the last one month by 8 percent.

In October, Kenyans who consumed 50KWh of power paid 6 U.S. dollars but the amount rose to 6.4 dollars in October, a jump of 7.7 percent.

Similarly, the majority of poor families who rely on kerosene for cooking and lighting, bought a liter of the fuel at 0.65 dollars in October. The fuel’s price rose to 0.72 dollars in November, a rise of 7.5 percent.

The increase in electricity prices, which have hit a six-year high, is blamed on the volatile shilling and second fuel levy.

The shilling is currently exchanging against the dollar at an average of 103.00 after strengthening from 103.70.

The fuel levy, on the other hand, is directly linked to the amount of power generated by diesel generators and injected into the national grid.

The charge doubled in August to 0.02 dollars per unit of electricity consumed, according to the Energy Regulatory Commission, mainly because of increased generation of power from thermal sources.

“The higher cost of electricity in October was attributed to increase in fuel cost adjustment charges which outweighed the decreases in foreign exchange adjustment charges per KWh,” said the KNBS.

Cooking gas prices, on the other hand, have risen to an average of 21 dollars in the last one month from 20 dollars while charcoal by 0.10 percent to 0.81 dollars per bag.

The cost of petrol and diesel, mainly used by vehicles and some manufacturers, have increased by 1 percent and 4 percent respectively in the last one month to 1 dollar and 0.93 dollars.

Families across the board, but in particular middle and low income earners, are already feeling the pinch of the rising energy inflation.

“I was happy that food prices had gone down but this now amounts to nothing as the benefit has been taken away by the high cost of fuel. Last month I used about 200KWh and paid 40 dollars, this time I believe I would pay more as power cost rises. This is expensive,” accountant John Rubwa said Friday in Nairobi, adding that he is now keen on how cooking gas is used in his house.

Among the worst hit by the rising fuel prices are public transport service vehicles (matatu) drivers, a majority whose vehicles use diesel and petrol.

“The cost of fuel is rising faster that is making business difficult. Right now I have been forced to use additional 4 dollars for five trips a day from Komarock to the Nairobi central business district yet I cannot pass the cost to commuters. I hope things will change,” said Simon Kariuki, a matatu driver.

Kenya’s economy is fuel driven, therefore, a slight rise in prices has spiral effect on other sectors.

“High cost of fuel is certainly burdening households and it is just a matter of time before the full effect of the prices start to be felt. Inflation would go up and people would not afford clean fuels resorting to firewood, which is not a good thing,” said Henry Wandera, an economics lecturer in Nairobi. Enditem

Source: Xinhua/NewsGhana.com.gh


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