The Energy Petroleum Regulatory Authority (EPRA) has revealed the factors that determine how deeply consumers will afford their commodity.
The authority recently disclosed that the calculation of fuel prices each month was dependent on several different cost components.
They highlighted landed costs, which entail expenses incurred when petroleum products arrive in the country through Kenyan ports.
Another factor the authority uses is the distribution of costs, which calculates expenses related to the transportation of fuel from import terminals to different retail outlets all over the country.
Government levies also plays a role in determining the pump. If the taxes and levies are favorable the authority is able to determine how prices will be set at least for the next thirty days.
EPRA further stated that the key determinant of pump prices is the margins accrued by Oil Marketing Companies (OMCs).
The authority consolidates the margins and determines the final pricing of fuel products, including Premium Motor Spirits (PMS), Automotive Gas oil (AGO) and Illuminating kerosene (IK).
