The Central Bank of Kenya (CBK) has explained the latest trend in the international oil market which has seen the prices of the commodity drop to an all-time low ahead of the review of Kenya's pump prices.
In its weekly bulletin on the financial status of the country and the globe, CBK noted that the drop in prices was occasioned by a drop in demand by two main oil importers.
According to the report, the drop in demand was witnessed in China and the US.
"International oil prices declined during the week ending December 7, reflecting weak demand in the US and China, and increased oil output from the U.S," read the report in part.
"Murban oil price declined to USD 75.18 (Ksh11,641) per barrel on December 7 from USD 85.51 (13,240) per barrel on November 30.
On the other hand, the drop in demand in the US has been occasioned by the increase in the production of oil in parts of the country.
China's decreased demand, on the other hand, was attributed to slow economic growth leading to an oversupply for other countries.
Meanwhile, the Energy and Petroleum Regulatory Authority (EPRA) is expected to release new pump prices for December - January.
It is not yet clear whether the recent trend in the global market will be reflected in EPRA's calculations. The cost of purchase of the oil is usually among the factors considered during the calculations.
Notably, President William Ruto while on tour to Kirinyaga County on November 18 had promised a significant drop in prices this month. He claimed that the drop in prices would be as a result of the government's interventions including the G to G deal.
As of today, Super Petrol, Diesel and Kerosene are retailing at Ksh217.36, Ksh203.47 and Ksh203.06, respectively.
"You have seen that we have started to reduce the price of fuel. Next month the price will be reduced much more. That will also be the case in January until we get to a sustainable price," he promised then.