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Number of the Week (11.3%): Comparison of the Prices of Petroleum products among EAC countries


Number of the Week (11.3%): Comparison of the Prices of Petroleum products among EAC countries

Post date: Mon, Jan 18, 2016  |   Category: General   |  



Petroleum is one of the essential commodities in the Kenya’s economy. According to Kenya National Bureau of Standards, in 2014, the total value of imported petroleum products amounted to Ksh 293 billion, this accounts for 18.08% of the total value of imported goods. Petroleum products constitute the largest imports followed by industrial machinery. How does the price of petroleum products in Kenya compare against peers and across the world? This week we provide a comparative analysis of the petroleum oil prices (diesel and gasoline (petrol)) with the EAC countries and compare this against the world average price. The data is obtained from the globalpetrolprices.com and Kenyan values are benchmarked with the data from Energy and Regulation Commission of Kenya – ERC. This is illustrated in the chart below:

Without taking into account the purchasing power parity (differences in the ability to purchase commodities), the prices of petroleum products in Kenya are cheaper compared to most EAC peers. The chart illustrates that only Tanzania has cheaper petrol than Kenya in the month of January 2016. In addition, the prices of petrol and diesel in Kenya are also observed to be below the world’s average, as illustrated by the line across the bars. The relatively high petroleum prices in Uganda, Rwanda and Burundi is mainly attributed to the fact that, unlike Kenya and Tanzania these are landlocked and hence incur higher transportation costs.
Number of the Week: 11.3%
  • According to ERC, price of super petrol is Ksh 88.64 per litre for Nairobi (for the period starting 15th January 2016) translating to US$ 0.86 per litre. This price ranks Kenya as the second least expensive in EAC countries after Tanzania.
  • The price of diesel was revised to Ksh 76.70 per litre for Nairobi (for the period staring 15thJanuary 2016) translating to US$ 0.75 per litre. This price ranks Kenya as the least expensive in EAC countries. Kenya is followed by Uganda, Rwanda and the Burundi.
  • At US$ 0.86 per litre of Petrol, Kenya’s price is 11.3% below the World average (US$ 0.97 per litre)
  • At US$ 0.75 per litre of Diesel, Kenya’s price is 9.6% below the World average price (US$ 0.83 per litre)

 




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