@BusinessDaily

Sharp rise in paraffin prices hits consumer

8 months ago, 12 Mar 08:02

By: Neville Otuki

Kerosene prices have doubled in the past two years due to a blend of higher taxes and rising global oil costs, hurting consumers that use the fuel for lighting and powering their cook stoves. Aside from home use by low-income earners, small-time fishermen worldwide have for long relied on kerosene lamps to provide vision during their nighttime fishing. In Kisumu, kerosene currently costs Sh78.66 per litre at the pump, having risen steadily over the past two years from Sh41.54 in a similar period of 2016. This has had the impact of piling financial pressure on users, including fishermen, who most often pass the additional costs to fishmongers and ultimately to end buyers. To cut costs, a number of fishermen have switched to use of solar powered kits that can be charged for nighttime lighting at lower costs. Paraffin prices shot up after the Treasury introduced excise duty of Sh7.20 per litre in June 2016, to help narrow the yawning gap in its price with diesel and petrol.  This was meant to reduce cases of fuel adulteration since unscrupulous dealers had taken to mixing low-cost kerosene with diesel and petrol for higher margins in a country where petroleum prices are controlled. Most recently, fuel prices have been on a steady rise due to rising global prices that are recovering from big drops in 2016 and 2015. Fuel prices vary across the country due to transport costs, with consumers in Mombasa port city enjoying the lowest pump prices since it is where the imported cargo lands and stored for distribution. In Mombasa, for instance, paraffin retails at Sh73.98, or nearly Sh5 lower than what Kisumu consumers pay. The government takes a total of Sh8.41 in taxes from every litre of kerosene at the fuel pump, making it the least taxed fuel, in comparison to petrol whose taxes stand at Sh39.16 per litre and diesel (Sh29.57). The huge price differences have seen some dealers blend paraffin with the other pricier commodities to make a killing at the pump, even as unsuspecting motorists bear the brunt of the adulteration shortening the life span of their engines. Kenya in 2010 started controlling maximum price of petrol, diesel and kerosene and uses a formula to review pump prices monthly, based on fluctuations in global crude oil prices, freight costs and forex market.
Read More


Category: business news opinion markets economy corporate lifestyle

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@BusinessDaily

Sharp rise in paraffin prices hits consumer

8 months ago, 12 Mar 08:02

By: Neville Otuki
Kerosene prices have doubled in the past two years due to a blend of higher taxes and rising global oil costs, hurting consumers that use the fuel for lighting and powering their cook stoves. Aside from home use by low-income earners, small-time fishermen worldwide have for long relied on kerosene lamps to provide vision during their nighttime fishing. In Kisumu, kerosene currently costs Sh78.66 per litre at the pump, having risen steadily over the past two years from Sh41.54 in a similar period of 2016. This has had the impact of piling financial pressure on users, including fishermen, who most often pass the additional costs to fishmongers and ultimately to end buyers. To cut costs, a number of fishermen have switched to use of solar powered kits that can be charged for nighttime lighting at lower costs. Paraffin prices shot up after the Treasury introduced excise duty of Sh7.20 per litre in June 2016, to help narrow the yawning gap in its price with diesel and petrol.  This was meant to reduce cases of fuel adulteration since unscrupulous dealers had taken to mixing low-cost kerosene with diesel and petrol for higher margins in a country where petroleum prices are controlled. Most recently, fuel prices have been on a steady rise due to rising global prices that are recovering from big drops in 2016 and 2015. Fuel prices vary across the country due to transport costs, with consumers in Mombasa port city enjoying the lowest pump prices since it is where the imported cargo lands and stored for distribution. In Mombasa, for instance, paraffin retails at Sh73.98, or nearly Sh5 lower than what Kisumu consumers pay. The government takes a total of Sh8.41 in taxes from every litre of kerosene at the fuel pump, making it the least taxed fuel, in comparison to petrol whose taxes stand at Sh39.16 per litre and diesel (Sh29.57). The huge price differences have seen some dealers blend paraffin with the other pricier commodities to make a killing at the pump, even as unsuspecting motorists bear the brunt of the adulteration shortening the life span of their engines. Kenya in 2010 started controlling maximum price of petrol, diesel and kerosene and uses a formula to review pump prices monthly, based on fluctuations in global crude oil prices, freight costs and forex market.
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