Fuel prices are expected to rise slightly following the approval of new transport and storage tariffs by the Energy and Petroleum Regulatory Authority (EPRA)
In a gazette notice, the energy sector regulator has revealed the higher Kenya Pipeline Company (KPC) tariffs which cover the 2022-2023 to 2024-25 tariff control period.
The applicable tariff for the 2022-2023 financial year has been set at Ksh.5.03/m3/km, 9.1 percent higher than the previous holding tariff of Ksh.4.61.
The composite tariff is set to graduate to Ksh.5.12 for the 2023-2024 financial year before settling at Ksh.5.44 for the 2024/25 fiscal year.
The approved tariff is nevertheless slightly lower than the proposal made by KPC which would have seen the tariff rate rise to Ksh.5.50/m3/km by June 2025.
EPRA has backdated the effective date of the new tariffs to October 15 with subsequent adjustments set to happen on July 15 for each year of review.
The tariff adjustment is expected to cushion KPC from higher expenditures in the next tariff period which includes the laying of a new Mombasa-Nairobi pipeline at the estimated cost of Ksh.30 billion.
The higher adjustment is further expected to improve KPC revenues which had dwindled under tariff cuts effected in 2019-20 to the 2021-22 cycle.
The adjustment is expected to result in a marginal rise to pump prices in the factor of cents per litre.
For instance, in its presentation the tariff review earlier this year, KPC had stated that it expected the upward revision to result in a 54 cents hike to fuel prices.
The tariff review proposal had been subjected to stakeholder views in September.
