The Kenya Pipeline Company (KPC) is seeking to increase tariffs charged on transporting and storing fuel by 36 per cent.
In the application to the Energy and Petroleum Regulatory(Epra), KPC wants to increase charges at the Nairobi depot from Ksh2,074.5 per cubic metre of petroleum to Ksh2,617.33 within the financial year 2022/23, a figure that would further hike to Ksh2,799.98 in 2023/34, and Ksh2,824.57 in 2024/25.
In case the changes are approved, oil marketing companies evacuating fuel from the Eldoret depot will pay Ksh4,228.31 per cubic metre in the next three years from the current Ksh3,669.56.
In the current market structure, levies and taxes make up about 40 per cent of the total cost of petrol, 37 per cent of diesel, and 36 per cent of the cost of kerosene. Currently, storage and distribution costs are charged at Ksh3.62 per litre of petrol, Ksh3.23 on diesel, and Ksh3.22 on kerosene.
The charges are used to cater for pumping the fuel through the KPC pipeline, pipeline losses, the costs of evacuating the fuel from the pipeline to road tankers, depot losses, and the costs of delivering the fuel to petrol stations that are within 40 kilometres of Nairobi.
A litre of petrol is currently retailing at Sh159.12, diesel at Sh140 per litre, and kerosene at Sh127.94. Epra said consumers would have been paying Sh214.03, Sh206.17, and Sh202.11 per litre respectively had the state not applied the subsidy.
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