Kenya has sharply raised the cost of petroleum, with diesel prices rising by a record margin despite a fuel tax cut, as the conflict in Iran pushes up global oil prices.
In its latest review, the energy regulator raised the cost of diesel by 40 Kenya shillings to 206 ($1.6; £1.2) a litre, while petrol rose by 28 shillings to a similar level. It said this reflected higher global oil and shipping costs, even as the government cut value added tax to 13% from 16%.The new prices will last until 14 May when the next review is due.
Fuel shortages have been reported in parts of the country, although the government insists stocks are sufficient and accuses some fuel companies of hoarding supplies.
The reports of shortages have been overshadowed by controversy over an allegedly substandard consignment imported last month outside government-to-government arrangements and at a significantly higher cost.
Reports that the fuel may have entered the market after being blended with stocks in government storage tanks have sparked public outrage and calls for accountability.
The government has previously said it cancelled the consignment amid concerns over its quality and cost and barred oil marketers from selling it. The matter, which led to the arrest and resignation of senior energy officials, is still under investigation.
On Wednesday, the Energy and Petroleum Regulatory Authority (Epra) said the disputed consignment had not been included in the computation of the new prices.
The price rises come amid the global fuel crisis caused by the US-Israel war with Iran that began on 28 February.
Concerns remain that the energy crisis may deepen despite a conditional two-week ceasefire signed last Wednesday that included opening the Strait of Hormuz, a key shipping route for global oil and gas supplies.
Shipments through the strait have largely been at a standstill since the war began.
Countries have taken various measures to cope with the crisis and cushion consumers from the price shocks, including cutting taxes and minimising wastage.
Kenya’s directive to cut VAT on fuel is scheduled to last until July. South Africa announced a one-month cut in the fuel levy two weeks ago to limit pump prices.
Other African countries to have announced similar measures include Zambia, Namibia and Ghana, while South Sudan announced electricity rationing and Ethiopia prioritised certain sectors to deal with the crisis.
