Why petrol sells at lower prices than diesel

Oil prices have fallen so much that some traders started paying buyers to take oil off their hands on Monday, in a bizarre twist. PHOTO | FILE | NATION MEDIA GROUP Whenever prices drop, they never pass these benefits to consumers until they clear the old stock. That is what happened this month.

With the crash, there is no motivation for refineries to convert crude into petrol, diesel or any other fuel since very few people are driving or flying.

Mr Titus Wamalwa, a driver of a commercial vehicle, stands at a fuel station in Lavington, Nairobi seemingly shocked.

Since Mr Wamalwa started driving 10 years ago, diesel has never cost more than petrol.

Even Shell’s V-Power, a premium product that promises better engine performance and speed, is also cheaper than diesel.

“I don’t understand. The only fuel that has remained cheaper than diesel is kerosene,” a bewildered Wamalwa says as he fills his tank and pays via mobile phone.

He has bought some 20.5 litres of diesel for Sh2,000. This translates to about Sh97.56 per litre. It is at least Sh4.6 more expensive than super petrol, which is used by smaller private cars.

Super petrol is retailing at Sh92.87 per litre on this day, just slightly more than the V-Power, which is selling for Sh92.87 at the same station.

A majority of heavy commercial vehicles, pick-up trucks, long distance buses and matatus use diesel.

The same is the case with factories that have power generators. That explains the reason bus and matatu fare increases every time diesel prices go up.

CRUDE OIL Mr Wamalwa represents thousands of motorists who still cannot understand how petrol ended up being cheaper than diesel, especially when most private cars are not on the road.“The diesel consignments used in the computation of prices this month were procured in February when the crude oil price was relatively high,” Energy and Petroleum Regulatory Authority (EPRA) Director-General Pavel Oimeke said in a statement.EPRA was established as the successor to the Energy Regulatory Commission (ERC) under the 2019 Energy Act.“Accordingly, the effect of the recent crash in crude oil prices will be reflected in the retail price of diesel in subsequent reviews,” he added.EPRA said the changes in prices this month, which saw super petrol, diesel and Kerosene reduce by Sh18, Sh4 and Sh18 respectively, were as a consequence of the average landed cost.The price of imported super petrol decreased by 34.6 […]

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