This archive report was first published on 15 May 2020.
On May 15, 2020, the Petroleum ministry made a crucial decision that would impact the lives of Kenyans. The ministry rejected a petition by oil marketers to exclude cheaper fuel in the review of prices for May.
The decision was a welcome relief to many, as it ensured that motorists, industrialists, and transporters would not be denied the benefits of low global crude prices. If the marketers had their way, the costs of energy and transport would have remained high, and this would have been reflected in the prices of goods and services.
However, with the latest price review, consumers in Nairobi will pay Sh82.28 for a litre of super petrol from Sh92.87, representing a Sh10.59 drop. Kerosene costs will increase by 3.19 percent to Sh79.79.
Marketers need to adapt to the changing market conditions and find new ways to ensure their profitability. They can do this by embarking on aggressive marketing of their products, offering discounts, hedging, and insuring their businesses from unforeseen shocks.
As the world grapples with the Coronavirus pandemic, innovation is the new normal. Fuel marketers should feel challenged to find new and creative ways of ensuring their profitability, rather than relying on old models that can no longer withstand such great shocks.
