NAIROBI - Kenya's energy sector regulator said on Tuesday fuel retail prices for super petrol, diesel and kerosene will decrease in the latest review that is expected to ease the cost of living in the country.

The Energy Regulatory Commission (ERC) said a litre of super petrol will fall by 0.024 US dollar to retail at 1.27 dollars, diesel will reduce by 0.0048 dollar to retail at 1.16 dollars and kerosene will decrease by 0.0051 dollar to retail at 0.88 dollar.

"We have observed an upward trend in the price of crude and refined petroleum products in the international market over the last month. This may adversely affect pump prices in subsequent price reviews," ERC Director-General Engineer Kaburu Mwirichia said in a statement issued in Nairobi.

He said the maximum prices for the other towns have been adjusted accordingly in the other towns of the East African nation.

The latest move comes three weeks after an oil tanker with 82, 000 tons of crude oil delivered the first oil cargo to the Kenya Petroleum Refineries Limited (KPRL) at its Kipevu jetty along the Indian Ocean coastline, to mark its successful transformation into a merchant oil refinery.

The MT Albert, which docked at the Port of Mombasa on July 21, was loaded at Jabel Dhana in Abu Dhabi with the refineries first direct purchase since it transformed from a toll-refinery to a merchant refinery.

Kenyan oil firms have previously cited the high cost of refined petroleum products to loses incurred as a result of refining at the KPRL facility in Kipevu.

The first-ever direct purchase of crude oil was facilitated by the Kenyan Energy Ministry, initially criticized for failing to regulate the oil industry to keep prices lower.

The refinery executives said the arrival of crude oil cargo will boost competition among Kenya's existing fuel marketers, which may help ease fuel shortages and high pump prices.

The energy regulator said it's working closely with other government agencies and members of the public to ensure compliance.

"Some individuals found retailing petroleum at prices above the allowed maximum have been arrested and charged in court while others are expected to be arraigned in court this week," Mwirichia warned.

There had been a steady drop of fuel prices since December 2011 following the strengthening of the shilling against the major international currencies with the price of super petrol, kerosene and diesel decreasing from January.

Mwirichia said the Free On Board (FOB) price of Murban crude oil lifted in July was posted at 101.75 dollars per barrel, an increase of 4.52 percent from 97.35 dollars per barrel in June.

The average landed cost of imported super petrol decreased by 5.12 percent from 1,051.31 dollars per ton in June to 997.52 per ton in July.

Over the same period, the average landed cost of imported diesel decreased by 1.45 percent from 947.06 dollars per ton in June to 933.35 per ton in July while the average landed cost of imported kerosene increased by 2.02 percent to 909.92 dollars per ton in June to 928.33 dollars per ton in July.