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Are you paying more for fuel?
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Hello 👋🏾, it’s Brian from The Kenyan Wall Street!
Thank you for joining us for today’s edition of The Daily Brief! With 35,000+ subscribers from over 80 countries receiving this newsletter.
In today's newsletter, we analyse why fuel prices are relatively high despite the EPRA’s downward reviews.
Also read about Sanlam’s cash call in a bid to settle a loan from Stanbic Bank and Tanzania - Kenya’s progress on the Eastern Africa Power Pool (EAPP).
Take a look 👇🏾
â›˝Taxes keep Fuel Prices High Despite Global Easing
The government has sneaked in taxes and levies on fuel to a point where they are now slowing down significant price cuts on retailed products. In the December fuel review, taxes and levies charged for a litre of petrol accounted for 45.7% of the total retail price, 41.5% for a litre of diesel and 36.6% for a litre of kerosene.
In the latest monthly fuel review, the Energy and Petroleum Regulatory Authority (EPRA) reduced pump prices for the next 30 days, to lowest levels since March 2023. Consumers will pay KSh 176.29 per litre of petrol, of which KSh 80.50 is remitted to the taxman. For the KSh 165.06 per litre of Diesel, KSh 68.53 will go to taxes and levies. Kerosene will retail at KSh 148.39 a litre, of which KSh 54.34 is remitted to the tax authority.
Currently, Kenyans are taxed up to between 36% – 45% of the total retail prices. Below is a graph detailing the price movement of the three major fuels over the years…
Fuel prices since 2018
đź’ˇ Significant Progress on Regional Electricity Grid After Launch of Tanzania -Kenya Line
The Eastern Africa Power Pool (EAPP) initiative will see formative progress after the launch of trial operations for the 500-kilometer transmission line in the Tanzania – Kenya Interconnection Project.
The project will facilitate electricity exchange between the two East African countries by connecting the Isinya substation in Kajiado county with Arusha in Northern Tanzania. The Kenyan line will further extend north to Ethiopia while the Tanzanian line will extend southward to Zambia. The initiative will integrate the region’s power infrastructure enabling low-cost energy trading and stabilisation of the grid amidst rising demand for electricity.
“As policy makers, it is our duty to create an enabling environment for this market to thrive. This includes fostering a culture of cooperation, addressing any bottlenecks in the regulatory or technical frameworks, and ensuring that our national priorities align with regional goals,”
🏦 Sanlam Issues KSh 3.25bn Cash Call, Part to Settle Stanbic Loan
Sanlam Shareholders have approved Board of Directors’ request to recapitalise the insurer’s balance sheet through rights issue program.
The Rights Issue will be structured to raise up to Ksh3.250 billion, enabling the company to recapitalise its balance sheet by making an early repayment to an existing loan facility from Stanbic Bank Kenya.
Part of the rights issue proceeds will also be used as working capital, providing the firm’s management with the operational flexibility and resources to drive the Group’s growth and profitability. Sanlam Kenya Group reported a net loss of KSh 127 million for the full year ended 31st December 2023 compared to KSh 83 million net loss reported in the prior year.
“We have also authorised and granted the Board of Directors the necessary power to carry out a rights issue and to allot and issue up to 1 billion ordinary shares with a nominal value of KES 5 each to the holders of the issued ordinary shares.”
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