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Oil prices.. how low can it go?
Rank: Member Joined: 7/21/2010 Posts: 249 Location: nairobi
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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." ...A good thought, but cost of 1 barrel of crude (not refined product) is only of the many independent variables which determine your pump prices..others include demarrage, cargo importer premium, forex, dealer margin, without forgeting the over ksh 50per litre tax.... ..desire to succeed is always fighting with fear of failure..
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Rank: Elder Joined: 7/21/2010 Posts: 6,185 Location: nairobi
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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." i think oil prices are more of politics and raising private money than kenyans think,have you ever heard the top 2 talking about this matter which is very crucial to better the lives of all kenyans? the barrel of 2014 is still the same barrel today and i assume all logistics have not changed much in any case transportation of all products should be cheaper across the world "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Elder Joined: 12/4/2009 Posts: 10,712 Location: NAIROBI
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Oil prices globally hit rock bottom last week and now are on an upward trend. It gained 10% last week Thursday and Friday. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Chief Joined: 1/3/2007 Posts: 18,139 Location: Nairobi
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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* Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/3/2007 Posts: 18,139 Location: Nairobi
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mlennyma 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." i think oil prices are more of politics and raising private money than kenyans think,have you ever heard the top 2 talking about this matter which is very crucial to better the lives of all kenyans? the barrel of 2014 is still the same barrel today and i assume all logistics have not changed much in any case transportation of all products should be cheaper across the world Have matatu/bus/taxi rates come down since fuel became cheaper? Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 7/21/2010 Posts: 6,185 Location: nairobi
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VituVingiSana wrote:mlennyma 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." i think oil prices are more of politics and raising private money than kenyans think,have you ever heard the top 2 talking about this matter which is very crucial to better the lives of all kenyans? the barrel of 2014 is still the same barrel today and i assume all logistics have not changed much in any case transportation of all products should be cheaper across the world Have matatu/bus/taxi rates come down since fuel became cheaper? only in countries where the citizens have human behavior "Don't let the fear of losing be greater than the excitement of winning."
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Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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in my layman's opinion,I think with the current price of crude oil and factoring in taxes and other fixed costs, the price of petrol per litre should not be around Kshs 80-85 If Obiero did it, Who Am I?
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Rank: Elder Joined: 7/23/2008 Posts: 3,017
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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 "The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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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...
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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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
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Rank: Member Joined: 7/21/2010 Posts: 249 Location: nairobi
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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... .....another reason why you will not see lower pump prices, irrespective of global trends...http://www.businessdailyafrica.com/-Petrol-price-increase-looms-in-Rotich-s-new-September-tax/-/539546/3047612/-/v8476v/-/index.html ..desire to succeed is always fighting with fear of failure..
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Rank: Chief Joined: 1/3/2007 Posts: 18,139 Location: Nairobi
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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 OK. In the meantime, please fill up at KenolKobil. Thank you. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/3/2007 Posts: 18,139 Location: Nairobi
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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... No problem. In the meantime, please fill up at KenolKobil. Thank You. Come Again. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/3/2007 Posts: 18,139 Location: Nairobi
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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. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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VituVingiSana 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... No problem. In the meantime, please fill up at KenolKobil. Thank You. Come Again.  If Obiero did it, Who Am I?
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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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
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Rank: Chief Joined: 1/3/2007 Posts: 18,139 Location: Nairobi
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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. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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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.
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Rank: Elder Joined: 12/25/2014 Posts: 2,300 Location: kenya
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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
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Rank: Member Joined: 7/21/2010 Posts: 249 Location: nairobi
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...another Big fish have started feeling the heat..''Russian economy hit by oil price slide'' http://www.bbc.com/news/business-35398423..desire to succeed is always fighting with fear of failure..
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Oil prices.. how low can it go?
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