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Weaker Shilling forces fuel prices to rise

14 July 2015, 17:35 Victor Tinto

Nairobi - A weaker shilling has forced fuel prices in Kenya to rise, the Energy Regulatory Commision ERC has said.

The ERC, in a review announced Tuesday, increased the price of super petrol by KES 1.31 a litre and diesel by KES 1.25 per litre.

Kerosene went up by KES 0.96 per litre.

The commission said the rise was initiated because the mean monthly US dollar to Kenya shilling exchange rate depreciated from KES 96.86 per dollar in May to KES 98.13 per dollar in June 2015, which represents a 1.31% depreciation.

" The free on board (FOB) price of Murban crude oil lifted in June 2015 was posted at $63.70 per barrel, a decrease of 3.12 per cent from $65.75 per barrel in May," said the ERC in a statement.

The shilling has in recent months fallen hard against the dollar, raising the prices of several commodities and also prompting the Central Bank to increase the base lending rate by 1.5 percentage points to 11.5 per cent and forcing an increase in commercial bank lending rates.

The changes will also likely affect the cost of electricity as well as the cost of commuting.

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