EPRA Raises Margins for Oil Marketers in Kenya to KSh 17 per Litre, Withdraws Fuel Subsidy
- The Energy and Petroleum Regulatory Authority (EPRA) raised the margins for oil marketing companies in the July-August cycle
- This means that consumers will have to dig deeper into their pockets following the increase in petrol, diesel and kerosene costs
- EPRA revealed how much oil marketing companies will earn per litre after it implemented the recommendations to review margins
TUKO.co.ke journalist Japhet Ruto has over eight years of experience in financial, business, and technology reporting and offers deep insights into Kenyan and global economic trends.
The retail cost of petrol has reached its highest level since September 2024 after the Energy and Petroleum Regulatory Authority (EPRA) raised the margins for oil marketing companies by KSh 2.15 per litre.
Source: Twitter
The regulator increased the margins for the second time in four months, which raised the total price of the three regulated items by KSh 5 per litre.
In the July-August period, petroleum companies will make KSh 17.39 per litre of super petrol, up from KSh 12.39 in February.
Diesel margins increased from KSh 12.36 per litre in February to KSh 17.31 per litre in July, while oil marketers will earn KSh 17.24 per litre of kerosene up from KSh 12.36 in February.
What are oil margins?
Petroleum Outlets Association of Kenya (POAK) Chairman Martin Chomba described oil margins as value chain margins in petroleum supply.
He noted that the margins were to be increased commensurate with inflation and dynamic economic changes.
"You see, the oil market as margin, and it's not the oil market as margin. It's the value chain margins. So, the value chain margins are being done in an incremental way, not all at once. When they did what we call the cost of service study last year, which was due the year before, but for some reason was not done because it is done every five years, and it had been done in 2018," Chomba told TUKO.co.ke.
Why did EPRA increase margins for petroleum firms?
EPRA has been implementing the Cost of Service Study in the Supply of Petroleum Products (COSSOP) recommendations, which suggested raising margins for companies involved in the oil industry.
The energy regulator adopted the new pricing model to raise OMC margins by at least KSh 7 per litre of petrol, but stated that it would do so gradually.
Source: Getty Images
The margins went up to KSh 15.24 per litre for super petrol, KSh 15.16 per litre for diesel, and KSh 15.09 per litre for kerosene during the first phase in March.
EPRA increased this to over KSh 7 per litre for three items during the July-August pricing cycle.
What are fuel prices for the July-August cycle in Kenya?
The cost of super petrol increased by KSh 8.99 per litre as a result of the greater OMC margins, the subsidy's removal, and higher landing costs.
Kerosene climbed the most, by KSh 9.65, while diesel jumped by KSh 8.67.
During the pricing cycle ending on August 14, super petrol's retail price in Nairobi increased from KSh 177.32 to KSh 186.31 per litre.
Kerosene is now retailing at KSh 156.58 per litre, up from KSh 146.93, while diesel is now selling for KSh 171.58 per litre, up from KSh 162.91.
It is expected that Kenyans, who criticised the government for the move, will be severely impacted by rising pump costs as the price of necessities like food, transportation, and manufactured products rises.
Proofreading by Mercy Nyambura, copy editor at TUKO.co.ke.
Source: TUKO.co.ke
