Kenya fuel prices rise on weak shilling

Oct 14, 2011

NAIROBI - Kenya's energy regulator increased pump prices for petrol, diesel and kerosene from mid-October to mid-November, citing a weak shilling , volatile global economic performance and erratic crude prices on the international market.

NAIROBI - Kenya's energy regulator increased pump prices for petrol, diesel and kerosene from mid-October to mid-November, citing a weak shilling , volatile global economic performance and erratic crude prices on the international market.

The Energy Regulatory Commission raised the price of super petrol in the capital Nairobi by 2.75 Kenyan shillings ($0.027)per litre to 120.50 shillings, diesel went up by 2.77 shillings to 110.94 shillings per litre in its capital city Nairobi. Kerosene fell by 1.66 shillings to 89.95 shillings a litre.

The prices come into effect on Oct. 15.

"There has been an erratic trend in the price of crude and imported refined petroleum products in the international market coupled with volatile performance of the key economies in the world," said ERC in a statement.

"The local currency has depreciated relative to the U.S. dollar and this has impacted negatively on the local pump prices."

Fuel prices are a key driver of inflation in the east African nation of 39 million people, which has seen consumer prices rise to 17.32 percent in September.

Kenya's economy is highly dependent on diesel for transportation, power generation and agriculture and kerosene, is used in the homes of many of the country's population. Higher fuel prices are a key inflation driver.

The country is grappling with a currency which has weakened 20 percent this year, partly due to a rising import bill that mainly consist of oil products.

"Pump prices are likely to surge in response to the oil prices increase and the weak shilling which has forced marketers to petition the regulator for an increase in their mark-ups," Dyer & Blair Investment Bank said in a note ahead of the price release.

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