Government pulls populist move, retains pump prices at same levels
The government has retained fuel prices at the same levels as last month.
This is despite crude oil prices having gone up in March, resulting in the landed cost also going up from Sh49 per litre of super petrol in February to Sh53.99 in March. This would have meant higher prices, with projections showing prices may have jumped to over Sh127 per litre of petrol in Nairobi.
The oil marketing companies appear to have taken the hit and will have to do with lower profit margins. The money that the oil companies will take home has gone down to Sh7.95 per litre of super petrol compared to over Sh12 during the last price capping guide.
According to insiders, the government got into a deal with the oil firms to compensate them at a later date. Though details are yet to emerge, the source said there has been talks of the government possibly tapping into the Petroleum Development Levy (PDL) Fund to pay the marketers, but face the challenge of there being no mechanisms to draw from it.