Petroleum CS John Munyes Defends Rising Fuel Prices

March 17, 2021

Petroleum and Mining Cabinet Secretary John Munyes has defended the latest increase in pump prices.

In a statement on Tuesday, the CS said the Energy and Petroleum Regulatory Authority (EPRA) uses a formula outlined in the Energy (Petroleum Pricing) Regulations of 2010 to calculate the applicable petroleum pump prices.

He explained that the computation takes into account the landed costs, supplier margins, government taxes as well as storage and distribution costs.

“Petroleum is imported into Kenya through the Port of Mombasa and transported to the hinterland via the pipeline system operated by the Kenya Pipeline Company Limited (KPC). The last-mile delivery of petroleum products from the KPC depots to the retail stations or other points of consumption is undertaken through road tankers,” Munyes said.

According to Munyes, stakeholders in the business incur costs that are eventually reimbursed through the petroleum pricing process while ensuring a reasonable return to investors.

He said the importation of Super Petrol, Diesel, and Kerosene is a highly controlled process, and licensed Oil Marketing Companies are obliged to only import the aforementioned petroleum products through the Open Tender System (OTS).

Munyes further noted that taxes and levies form a key component of the petroleum pump price not only in Kenya but across many countries.

At the same time, Munyes said based on the current outlook of petroleum prices, the ministry is at an advanced stage of developing a framework for stabilization of petroleum prices which will cushion customers from price spikes.

“Part of the framework entails the development of Regulations to administer the Petroleum Development Fund; the draft Regulations are at the final stages of development.”

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