EPRA Unveils New Fuel Pricing Model as Economic Landscape Shifts

• EPRA consulted with various parties regarding the Second Cost of Service Study for the Provision of Petroleum Products (COSSOP II).
• The director general of the agency, Daniel Kiptoo, mentioned that the updated fuel pricing scheme will consider every expense involved in the petroleum supply process.
• The EPRA director for economic regulation and strategy disclosed that the government-to-government oil import agreement led to increased price premiums.

Japhet Ruto, who works as an editor for .co.ke, boasts more than eight years of experience in finance, business, and technology. He offers valuable insights into economic trends not only in Kenya but also in surrounding regions.

The Energy and Petroleum Regulatory Authority (EPRA) has introduced a fresh fuel pricing mechanism aimed at ensuring consistent prices within Kenya’s oil sector. This approach seeks to harmonize the needs of stakeholders including investors, consumers, and the government.

Why did EPRA implement a new fuel pricing model?

During a stakeholders' conference in Nairobi, EPRA Director General Daniel Kiptoo emphasized that the revised price framework, developed following extensive discussions, aimed to reflect the true expenses incurred across the entire petroleum supply process.

Kiptoo stated that the model's analysis took into account significant factors such as taxes, transport costs, fluctuations in exchange rates, and global crude oil prices.

He noted that 'the economic scene has experienced significant changes since the previous assessment in 2018,' according to MyGov.

Kiptoo emphasized that to ensure equitable pricing, the new system takes into account factors such as inflation rates, fluctuations in international oil prices, and the decline in value of the Kenyan shilling.

What were some additional elements that affected the development of the new fuel pricing model?

John Mutua, who serves as the director of economic regulation and strategy at EPRA, addressed these topics during his speech and highlighted key issues including retail price points, logistics expenses, and the acquisition processes for petroleum goods.

Mutua emphasized that the study assessed the precision of various cost metrics, covering everything from imports to retail distribution, and also examined the present petroleum price formula.

He pointed out that the shift in the government-to-government (G2G) approach from the Open Tender System (OTS), involving Emirates National Oil Company (ENOC) and Abu Dhabi National Oil Company (ADNOC), stabilized fuel supplies but led to increased premiums.

Specifically, he pointed out that liquefied petroleum gas (LPG) and kerosene experienced significant shifts in the market, and EPRA was working on enhancing demand prediction for these fuels.

Additionally, EPRA mentioned that they would modify the transportation fees, which have remained unchanged since 2010 even with increasing costs.

"The current retail operating margin stands at KSh 4.14. Initially, for super petrol, it will go up to KSh 4.96, marking an increase of KSh 0.82. Regarding secondary transportation, it currently sits at KSh 0.54 but will be adjusted to KSh 0.86 during the initial phase. As for the rest, they will undergo replacement," stated Mutua.

What are the current fuel costs in Kenya?

On Friday, March 13, .co.ke It was reported that EPRA declared the pump prices for the upcoming month, valid up until Monday, April 14.

The regulatory body kept the selling prices for petrol, diesel, and kerosene in Nairobi unchanged at KSh 176.58, KSh 167.06, and KSh 151.39 correspondingly.

As reported by EPRA, the typical landing cost for imported premium gasoline rose by 1.34% from January to February in 2025.

Nevertheless, the price of crude oil dropped from KSh 10,234.32 per barrel in March 2024 to KSh 9,486.10 in February 2025.