Fuel Prices Drop, Is Ngamia One oil Discovery Finally Paying off?

Kenya fuel prices drop a 5 month Low

Last week was a relief to motorists as for the first time in 5 Months, fuel prices at the pump stations dropped tremendously, despite an inflation tax that was announced last month.

The Energy and Petroleum Regulatory Authority (EPRA) cut the price of a litre of super petrol by Sh 2.86 and that of diesel by Sh 3.28, citing a fall in the landed cost of the two commodities.

This reduces the maximum price of a litre of petrol in Nairobi to Sh112.53, the lowest since mid-May, while that of diesel will be at a five-month low of Sh100.60.

Whereas the prices of the precious commodity that drives the economy is attributed to a fall in costs of the commodity, maybe the sale of Kenya’s first barrels of crude oil may have contributed to the fall in prices.

On Friday 16th August, Kenya made its first sale of about 200,000 barrels of crude oil to a state owned oil firm, ChemChina Petrochemical, whose shipment is scheduled to be on September.

The disclosure comes two weeks after President Uhuru Kenyatta announced the Sh1.2 billion ($12 million) sale of the crude trucked from Lokichar to Mombasa over the past one year. With the estimated cost per barrel being U$ 61.99

The Early Pilot Scheme, as it is known, will be meant to assess the value and profitability of the scheme that will in turn decide how the revenue will be divided between the government, the community and the county government under which the reserves lay.

Motorists are however happy that the long awaited sale has finally requlated the fuel prices and many are hopeful that the discovery will greatly impact the lives of Kenyans that heavily depend on refined oil.

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