The Energy Regulatory Commission (ERC) cut the maximum price of a litre of super petrol in the capital by almost 8 percent to 108.39 shillings ($1.29), while reducing that of a litre of diesel by the same margin to 97.42 shillings.

"The downward trend in the price of crude and refined petroleum products in the international markets observed in the last three months has continued to hold," ERC said.

The price of kerosene per litre, which is relied on widely by the poor to light their homes and power cooking stoves, was reduced by 8.01 shillings, ERC said, without saying what the price was.

Year-on-year inflation fell to 10.05 percent in June, having fallen every month from its peak of just under 20 percent last November.

The rate has been dropping due to a tight monetary stance by the central bank, improved food production and the downward movement of the price of oil.

The government introduced monthly fuel price reviews -where it sets the maximum price in the middle of the month- in late 2010 following a surge in retail prices of fuel.