Several developments in the petroleum industry are set to affect the review of fuel prices conducted by the Energy and Petroleum Regulatory Authority (EPRA) on Sunday, January 14.
These factors cut across both the local and international markets, from lowered global prices to Kenyan CEOs' reviews conducted by the Central Bank of Kenya (CBK).
Saudi Aramco Reduces Global Prices for Select Continents
Saudi Aramco, the country’s major fuel supplier on Sunday announced that it was lowering the fuel prices for Asia customers to a record level in the past 27 months.
In a statement by the company, Aramco noted that the drop in the official selling price for the crude oil variant Arab Light to Asia was lowered by Ksh317 a barrel.
Saudi Aramco also lowered prices for Europe and the US too, excluding Africa. However, experts predict that Africa may follow.
Aramco Drops Kenyan Company in G2G Deal
However, reports released on January 9, 2024, alleged that Aramco had dropped Oryx Energies(Kenyan OMC) as one of its local diesel importers in the government-to-government fuel deal.
Nonetheless, Aramco replaced Oryx with Asharami & One Petroleum in the changes made in December last year.
Global Prices Drop
Global oil prices have been on a steady drop since November last year. As of Wednesday, January 10, international benchmark Brent crude was trading at $79.94 per barrel down 0.08% from the previous $80.
CBK Acknowledges Drop in Global Prices
In December last year, the Central Bank of Kenya confirmed an all-time low drop in global oil prices, owing to a drop in demand for oil in China and the US.
"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," CBK stated.
EPRA uses the CBK dollar-to-shilling exchange rate to review fuel prices.
CEOs Warn of Higher Fuel Prices
Despite the good news from various reports, CEOs from various firms across different sectors in the country projected that fuel prices will rise in the first quarter of 2024.
According to a CEO’s survey conducted by CBK, the depreciating shilling against the dollar which is at Ksh157.50 per dollar, will affect the importation deals transacted in the USD.
Houthi Revolution in the Red Sea
Local manufacturers in the country recently announced plans to hike the prices of goods over importation delays caused by the Houthi attacks and blockage of the Suez Canal.
Houthi, in support of Palestine's Hamas, were accused of attacking commercial vessels along the Red Sea assumed to be headed for Israel, affecting the importation of goods to Kenya, which highly depends on the Suez Canal as a freight route.
Tanzania Lowers Fuel Prices
As neighbouring Tanzania enjoys lower fuel prices, Kenyans remain hopeful that EPRA will bear good news. Tanzania based its drop on lowered global prices.
Petrol, diesel and kerosene in the neighbouring country retail at Ksh193.52 (Tsh3,084), Ksh193.14 (Tsh3,078) and Ksh218.56 (Tsh3,510) respectively.
In Kenya, petrol, diesel and kerosene currently retail at Ksh212.36, Ksh201.47 and Ksh199.05 respectively.
