Tariff Setting : Petroleum
The Authority undertakes retail pricing of petroleum products (Diesel, Super Petrol and Kerosene) as stipulated in the Energy (Petroleum Pricing) Regulations, 2022.
The Pricing Regulations introduced a formula that EPRA uses in determining the maximum wholesale and retail pump prices of Super Petrol, Regular Petrol, Diesel and Kerosene (the Regulated Products) as follows:
The landed cost of petroleum products shall be determined as follows:
Cl is the weighted average cost in Kenya shillings per litre of petroleum products imported through the OTS through a gazetted primary storage depot;
Virp is the volume in litres of a cargo of petroleum product imported through the OTS and discharged at the port of Mombasa from the 10th day of the previous month to the 9th day of the pricing month;
Cirp is the unit cost of a cargo of petroleum product imported through the OTS and discharged at the port of Mombasa from the 10th day of the previous month to the 9th day of the pricing month in Kenya Shillings per litre;
The maximum wholesale price of petroleum products in Kenya Shillings per litre shall be determined as the sum of the following
Pw= Cl+ Jhc+Cp+ Lps+Pt-f-Lpt +Css + Lss+ Cf+ Mw+ Y + T + VAT
Pw = the maximum wholesale price
Cl = the landed cost of imported petroleum products
Jhc = the jetty handling costs
Cp = the primary storage costs
Lps = the allowable losses on primary storage
Pt = the primary transportation costs
Lpt = the allowable losses on primary transport
Css = the secondary storage costs
Lss = the allowable losses on secondary storage
Cf= the inventory financing costs
Mw = the wholesale margin
Y = is any other prudently incurred cost approved by the Authority
T = the applicable taxes (Excluding VAT)
VAT= Value Added Tax
For super petrol, kerosene and automotive diesel, the Pricing formula used is:
The maximum retail price of petroleum products shall be the sum of the following –
Pr = Pw + Ts + Mri + Mro + VAT
Pr is the maximum retail price of petroleum products
Ts is the cost of transporting petroleum products from a secondary storage depot to a retail dispensing site.
Mri is the retail margin corresponding to the investments associated with a benchmark retail dispensing site.
Mro is the retail margin corresponding to the operating costs associated with a benchmark retail dispensing site.
The Authority may, by a notice in the Kenya Gazette, publish the Jhc, Cp, Pt, Cf, Lss, Lps, Ts, Css, x-factor, Kpt, Krd, Mri, Mro, Mw, and the list of pricing towns from time to time.
The Authority may, by a notice in the Kenya Gazette introduce a new factor provided that such a factor is a verified prudent cost.
The retail and wholesale prices for Super Petrol, Automotive Diesel and Kerosene are published monthly on the 15th of every month.