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Fuel price review to see diesel, kerosene drop as petrol rises

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By EDWIN OKOTH

The spotlight will remain on oil marketing companies as new prices for the next month are announced on Sunday.

This is after the regulator recently raised the alarm over artificial shortages in some areas.

Petrol pump prices are expected to jump by at least Sh6.50 per litre in Nairobi starting Monday, with diesel users expecting further relief at the pump with a Sh2 drop per litre, according to Energy and Petroleum Regulatory Authority documents seen by the Nation.

CRUDE OIL PRICES

“Between May and June 2020, international crude prices increased by 33.33 per cent with Murban crude quoted at an average of $23.52 per barrel by close of May 2020. As a result, the prices of Premium Motor Spirit (PMS), Automotive Gas Oil (AGO) and Illuminating Kerosene (IK) increased by 38.18 per cent, 3.38 per cent and 12.65 per cent, respectively, in the international market,” read the brief.

Kerosene prices, which jumped slightly last month after it was excluded from the monthly tendering, are expected to record a drop of at least Sh16 per litre in Nairobi.

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The changes in motor fuel prices is a double-edged sword for some fuel dealers who had begun betting with the June pricing by hoarding the commodity to make a kill after today’s price revision.

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It will be bad news for those who may have hoarded diesel stocks as they stand to lose their bets on the commodity, which is usually sold in higher volumes compared to petrol.

On average, motorists in Kenya consume 202 million litres of diesel every month compared to 155 million litres of petrol, according to data from the regulator.

FUEL CONSUMPTION

The coronavirus-driven drop in fuel consumption has pushed dealers on the edge — the low prices could have presented an opportunity for higher consumption.

The travel restrictions and curfew will see dealers continue recording low sales, although slightly higher consumption may result from the revised curfew hours.

International crude prices have experienced a rapid recovery after the Organisation of the Petroleum Exporting Countries (OPEC) agreed to cut production by 9.7 million barrels per day at the start of May. The move has kept the prices above $40 (Sh4,240) per barrel since then.

EPRA warned marketers who were hoarding fuel that they risked losing their licences or financial penalties.

LOWER PRICES

Director-General Pavel Oimeke said the hoarding was mainly being done by the major oil marketers with huge storage facilities and who import large volumes.

“It is illegal and we will take stern action on them should they continue doing that. We have also instructed Kenya Pipeline to alert us when they notice such practices,” Mr Oimeke said.

The dealers unsuccessfully tried to block the lowering of fuel prices last month, decrying low demand due to Covid-19 control restrictions.

They wanted the Ministry of Petroleum to block EPRA from factoring the cheap fuel imports in computing the prices to enable them sell off the stocks still in their storage.

The prices could have fallen much lower, but an amendment to the taxable amount now means that motorists pay higher taxes.

Petroleum products are also subjected to excise duty and seven other levies.

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World Bank pushes G-20 to extend debt relief to 2021

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World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.

“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.

He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.

The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.

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People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.

For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.

Debt burdens, already unsustainable for many countries, are rising to crisis levels.

“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.

ALSO READ:Global Economy Plunges into Worst Recession – World Bank

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Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans

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The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.

“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”

According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.

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Tighter Reins on Platforms for Mobile Loans

The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.

Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.

Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.

SEE ALSO: Central Bank Unveils Measures to Tame Unregulated Digital Lenders

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Scope Markets Kenya customers to have instant access to global financial markets

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NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options. 

This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.

The Scope Markets app offers clients over 500 investment opportunities across global financial markets.

The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.

The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).

The platform also offers an enhanced client interface including catering for those who trade at night.

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The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour;  Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).

The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.

Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”

He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.

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