Effect of Regulatory Components on Volatility of Petroleum Pump Prices in Kenya

Abstract

Volatility of petroleum pump prices in Kenya has continually affected its economic growth. Almost all other sectors of the economy growth rely on the petroleum products and therefore its instability in price leads to poor planning of other sectors. Expected profits by the companies who planned when the prices were favourable becomes affected leading to losses.  Those who do not incur losses results to increasing the prices of goods and services making the costs of living increase and therefore lowering the social economic growth. This paper is an extract from the completed research on drivers of instability in prices of petroleum products in Kenya (Munyua & Ragui, 2013). The main objective is to find out how the regulatory component affects the volatility of petroleum oil prices in Kenya.

Keywords: Price regulation, Volatility, Pump prices, Petroleum products