- EPRA consulted with stakeholders regarding the Second Cost of Service Study for the Supply of Petroleum Products (COSSOP II).
- Daniel Kiptoo, who serves as the agency's director general, pointed out that the updated fuel pricing strategy will incorporate every expense associated with the petroleum supply chain.
- The EPRA director for economic regulation and strategy disclosed that the government-to-government oil import agreement led to increased price premiums.
Japhet Ruto, who works as an editor for CDRNEWS.co.ke, has accumulated more than eight years of experience in finance, business, and technology. He offers valuable insights into economic trends not only in Kenya but also internationally.
The Energy and Petroleum Regulatory Authority (EPRA) has introduced a fresh fuel pricing mechanism aimed at ensuring price consistency within Kenya’s oil sector, striking a balance among the needs of investors, consumers, and the administration.
Why did EPRA implement a new fuel pricing model?
During a stakeholders' conference in Nairobi, EPRA Director General Daniel Kiptoo emphasized that the revised price framework, developed following extensive discussions, aimed to reflect the genuine expenses incurred across the entire petroleum supply process.
Kiptoo stated that the model's analysis took into account significant factors such as taxes, transportation costs, fluctuations in exchange rates, and global crude oil prices.
He said that 'since the previous assessment in 2018, we have witnessed significant changes in the economic environment,' according to MyGov.
Kiptoo clarified that the new system ensures equitable pricing by factoring in inflation rates, fluctuations in international oil prices, and the weakening value of Kenya’s currency.
What were some additional elements that affected the development of the new fuel pricing model?
John Mutua, who serves as the director of economic regulation and strategy at EPRA, addressed these topics during his speech and highlighted key issues including retail price points, logistics expenses, and the acquisition processes for petroleum goods.
Mutua emphasized that the research assessed the precision of multiple cost metrics, covering areas from imports to retail sales, and examined the present petroleum price structure.
He pointed out that the shift from the Open Tender System (OTS) to a government-to-government (G2G) approach involving Emirates National Oil Company (ENOC) and Abu Dhabi National Oil Company (ADNOC) ensured more stable fuel supplies, albeit at increased costs.
Specifically, he pointed out that liquefied petroleum gas (LPG) and kerosene experienced significant shifts in the market, and as a result, EPRA was working on enhancing their demand forecasting for these items.
Furthermore, Mutua noted that EPRA would modify transportation costs, which have remained unchanged since 2010 even with increasing expenses.
"The current retail operating margin stands at KSh 4.14. Initially, for premium gasoline, it will be raised to KSh 4.96, an increase of KSh 0.82. Additionally, concerning secondary transportation costs, they currently stand at KSh 0.54 but will be adjusted to KSh 0.86 during the initial phase. As for the remaining categories, they will undergo replacement," explained Mutua.
What are the current fuel costs in Kenya?
On Friday, March 13, CDRNEWS.co.ke It was reported that EPRA stated the pump prices for the upcoming month will be valid up till Monday, April 14.
The regulatory body kept the selling prices for petrol, diesel, and kerosene in Nairobi unchanged at KSh 176.58, KSh 167.06, and KSh 151.39, respectively.
As reported by EPRA, the typical landing cost for imported super petrol rose by 1.34% from January to February in 2025.
Nevertheless, the price of crude oil dropped from KSh 10,234.32 per barrel in March 2024 to KSh 9,486.10 in February 2025.