Fuel prices are expected to go up if Kenya Pipeline Company (KPC) is granted approval to raise transportation and storage rates for the products.
According to the Energy and Petroleum Regulatory Authority (Epra), KPC has requested a revision of transportation and storage rates from 2021/22 to 2024/25.
“In January 2022, Epra received an application from KPC for the review of the pipeline transportation and secondary storage tariffs of the period 2021/22 to 2024/25,” Daniel Kiptoo Epra Director-General said in a notice.
KPC filed two separate applications, dated January 2022 and July 18th, 2022, demanding that storage prices paid by oil marketers be amended.
“KPC further submitted an amended tariff application dated July 18, 2022 taking into consideration capital expenditure provision for capacity enhancement of the eastern (Mombasa-Nairobi) section of the pipeline and the proposed revised throughput forecast,” he said.
Investing in capital KPC’s requests took into account capital expenditure allocations for capacity augmentation of the pipeline’s eastern (Mombasa-Nairobi) portion, as well as the suggested revised throughout prediction.
In an effort to cut the cost of pump prices, the energy regulator reduced KPC’s cumulative handling and storage fees by nearly 44 per cent in August last year, from Sh616 ($5.18) to Sh427 ($3.59) per cubic metre of fuel.
This was scheduled to rise to Sh468 ($3.93) in July 2022 and 0.25 (Sh30) in July 2023.
Fuel pricing often includes storage and distribution costs, suggesting that any rise will raise retail prices of diesel and gasoline.
Between August 22 and September 7, Kisumu, Eldoret, Nakuru, Mombasa, and Nairobi will have public consultations.