The Energy and Petroleum Regulatory Authority (EPRA) undertakes retail pricing of petroleum products of Diesel, Super Petrol and Kerosene as stipulated in the Energy Regulations, 2022. The Pricing Regulations introduced a formula that EPRA uses in determining the maximum wholesale and retail pump prices.
As per the law, the pricing starts at landed cost of fuel, which is the base cost of importing fuel. During the latest pricing cycle, the landed cost of Super Petrol rose by 41.53 per cent, per cubic metre. Diesel recorded an even steeper jump of 68.72 per cent.
The next pricing component is Government Levies/Taxes. Once fuel enters the domestic supply chain, it attracts a range of statutory charges, including excise duty, Value Added Tax (VAT) currently reduced to 8 per cent alongside road and petroleum development levies. These levies and taxes are what consist about 46% of the cost of fuel.
First set of taxes are the excise duty, that further inflated costs, with charges set at 21.95 shillings for Petrol and 11.37 shillings for both Diesel and Kerosene. Distribution costs add 4.93 shillings, 4.66 shillings, and 4.75 shillings respectively.
Overall, taxes and levies now account for 82.09 shillings per litre of Petrol, 74.90 shillings for Diesel, and 68.03 shillings for Kerosene, playing a decisive role in determining final pump prices.
From this point, further adjustments are made to account for losses during transportation and delivery, pushing prices higher.
In the latest review, retailers applied an average margin of 11.25 shillings per litre across all three products, while wholesalers charged 6.14 shillings for Petrol, 6.06 shillings for Diesel, and 5.99 shillings for Kerosene. Combined, these margins added roughly 17.39 shillings, 17.31 shillings, and 17.24 shillings per litre respectively.
And that is how EPRA arrives at the pump prices.
When all elements including landed cost, taxation, distribution and importers’ margins – are factored in, the base price of roughly Super Petrol at 197.6 shillings, Diesel at 196.66 shillings and Kerosene at 194.32 shillings.
