Energy Regulatory Commission (ERC) is established under the Energy Act, 2006, with several objectives among them to "regulate the electrical energy, petroleum and related products, renewable energy and other forms of energy". Therefore, through the legal notice no.196, The Energy (Petroleum Pricing) Regulations, 2010 was gazetted that set the maximum wholesale and the retail prices of petroleum products at a wholesale depot or retail dispensing site. The prices are usually set for a month, running from 15th to 14th of the next month. ERC set prices for the first time in December 2010.
For retail site, the price for Super Petrol, Regular Petrol, Kerosene, and Automotive Diesel is set in accordance with the following formula:
Pr = the maximum retail price of Super Petrol, Regular Petrol, Kerosene, or Automotive Diesel applicable in shillings per liter,
Pw = the maximum wholesale price for Petrol, Regular Petrol, Kerosene, or Automotive Diesel
mr = the allowable maximum retail gross margin as set,
z = the delivery rate from the nearest wholesale depot to a retail dispensing site in shillings per liter as determined.