Rank: New-farer Joined: 11/20/2015 Posts: 16 Location: Iraq
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enyands wrote:enyands wrote:VituVingiSana wrote:enyands wrote:VituVingiSana wrote:enyands wrote:enyands wrote:Obi 1 Kanobi wrote:VituVingiSana wrote:enyands wrote:Came across this article somewhere
"The highest price per barrel worldwide was about $140 ($140/barrel) around early 2014 and the price per litre (petrol) was about Ksh. 120 (Ksh. 120/litre). Now, the world prices have significantly dropped to $30 per barrel ($30/barrel). If we invoke simple algebra here, then the price per litre should not be more than Ksh. 45 per litre. One city in America which was charging about $4/gallon when the average world price was $140/barrel is now charging $1.60 per gallon (a 60% drop in the prices at the pump). Look at this:
If $140/barrel = Ksh. 120/litre
what of $30/barrel?
This computation returns a value of (120x30)/140 = Ksh. 26/litre (when adjusted for inflation and transportation costs, this should not be more than Ksh. 45/litre), which is equivalent to an average of 60% drop in prices at the pump worldwide {to be exact it is [(120-45)/120]x100=63%} . What is going on in Kenya is price gouging supervised by ERC. The petrol price per litre currently should not be more than Ksh. 50. Kenyans should demand access to information to know what has been going on at the ERC with regard to all the functions of ERC particularly the energy sector (energy products - gas, fuel, paraffin, electricity, etc.) and water services and pricing since ERC was formed. It has played with the minds of Kenya by reducing only 50cts, Ksh. 1.00 or Ksh. 2.00 per litre." It's a bunch of nonsense. Taxes: In the wake of high oil prices, GoK (political reasons) reduced the taxes at the time. These taxes are returning slowly but surely. Recently, there was an excise tax introduced. And in Sep 2016, VAT will be back. Margins: The margins given to OMCs & Retailers remain the same as they pay fixed costs. The rent, salaries, insurance, etc doesn't reduce/increase with oil prices lock in step. Lag Period: Brent for March delivery is at $30. That oil has to be transported to a refiner, refined then brought to Mombasa. None of that is free nor immediate. So the March price benefits flow to us in April. Then the ERC uses 2 months of pricing for an 'average' price. Inflation: Fixed costs in Kenya are affected by inflation. Salaries are up since 2012. So are rents. And many other expenses. Financing: 20% vs 12% much earlier. KES/USD: 103 vs 82 [I don't have a graph but it has been volatile] *Please feel free to correct any factual errors. I wish I had access to Bloomberg where I could chart to compare the oil prices vs forex vs interest rates* You are just making excuses to justify an untenable situation. It doesn't make sense to ignore the crude price drop from Usd 140 to Usd 30 and try to explain it as a result of other inputs. Example supplier of lag time is not linear. i.e marketers will not wait to process the cheaper crude oil before they can cut prices, in the real world, they can cut prices immediately they are able to replace expensive inventory with cheaper inventory to get ahead of competition. Petrol should be around Sh 60, but taking into account the blood sucking kenya govt taxes, maybe around Kes 70/litre Didn't I see the cs the other day instructing the ERC to report to him why the prices ain't dropping .let's not be selfish because we have invested shares in some oil company and think you will benefit from higher fuel prices . Bottom line is that some land Locked countries in Africa dropped their oil prices significantly .why not Kenya. Please someone correct me if keter (energy cs) didn't come out complaining about the higher prices. Who are we to say that yeye Hajui what he is saying and its us who know what we are saying .tuwache kudanganyana hapa smh... As a matter of fact I had to dig the archives .Kama cs is complaining about the rationale used on pricing index who is someone to say this is garbage link Of course! Our CSes are always right. They are the smartest, cleanest and most virtuous folks Kenya has produced. I think you should apply for the cs job since you always know all the jugeon words you can use on the press briefing to explain a simple point. Wanjiku will be made to believe you are Havard trained and always cut Above the rest. I don't have a car unfortunately.Mimi ni wanjiku but I'll always tell the matatu driver to be filling at kk as we go home since Oloo Aringo amesema... Thanks for the tip prof With your support I shall go right to the top. Please fill up at KK. Thank you. Come Again.  Forget about getting low gas prices and suck it up.matatu fare will hit the roof now. There it is. Sad The Government doesn't think that Kenyan's are supposed to be enjoying cheaper oil and its related products. The Treasury is on course to introducing a 16 per cent value added tax (VAT) on petroleum products, setting up consumers for another round of pump price increases even as global crude price continues its slide to the bottom.  Petrol price increase looms in Rotich’s new September taxMganga haagizi Mchicha.
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