Fuel prices have dropped by the biggest margin in over two years, of up to Sh5 per litre as consumers start enjoying relief from a drop in global prices of crude.

A litre of super petrol will from Friday retail at Sh212.36 in Nairobi from Sh217 while that of diesel will go for Sh201.47 from Sh203.47 in the new monthly cycle that ends on January 14, next year.

The last time pump prices dropped by an equivalent margin was in October 2021 when a litre of super petrol dropped from Sh134.72 to Sh129.72 while that of diesel dropped from Sh115.6 to Sh110.6.

The drop mirrors the continued fall in prices of crude, offering Kenyans relief and is also expected to keep inflation in check heading to the Christmas and New Year festivities.

“The maximum allowed petroleum pump price for super petrol, diesel and kerosene decreased by Sh5 per litre, Sh2 per litre and Sh4.01 per litre respectively,” Director General, Energy and Petroleum Regulatory Authority (Epra) Daniel Kiptoo said in the notice on Thursday evening.

The price per litre of Kerosene —mainly used for lighting and cooking by low-income households-- dropped to Sh199.05 from Sh203.06.

The drop follows a decline in the landed cost of refined fuel even as the State continues to subsidise pump prices.

The landed cost of super petrol dropped by the biggest margin of 16.1 percent to $694.44 (Sh109,388) from $827.75 (Sh128,831) per cubic metre while that of diesel fell 5.43 percent to $826.01 (Sh130,113) from $873.42 (Sh135,939) using the October and November exchange rates.

The drop will boost the government's efforts to further slow inflation and ease pressure on Kenyans whose purchasing power, especially for the employed, has been hit by increased taxation.

Inflation eased to 6.8 per cent last month from 6.9 per cent in October on lower prices of food compensating for an increase in prices of fuel and electricity.

Kenya’s economy is diesel-driven and costs of energy and transport have a significant weighting in the basket of goods and services that is used to measure inflation in the country.

Producers of services such as electricity and manufactured goods are also expected to factor in the fall in petroleum prices, giving Kenyans some relief during the Christmas and New Year festivities.

Kenya now has the second cheapest fuel in East Africa with a litre of super petrol priced at $1.38 and that of diesel at $1.31. Tanzania has the cheapest fuel at $1.26 and $1.29 per litre of super petrol and diesel respectively following the latest review.

Pump prices have been on a sustained climb since October 2021 despite the application of a stabilisation kitty meant to cushion consumers in the wake of a global rally in crude prices. A continued drop in the global crude prices looks set to lower local pump prices below the Sh200-a-litre mark early next year.

Murban crude prices—the benchmark used by the Epra for its monthly pricing cycles—have been on a sustained drop on waning demand in the US and China and production cuts by the Organisation of the Petroleum Exporting Countries.