Amid fears of a potential hike in pump prices owing to the market volatilities in the Middle East, Kenyans can now breathe a sigh of relief after the Central Bank of Kenya (CBK) highlighted positive developments in the fuel sector.
In its weekly report analysing the global economy, CBK focused on dollar dominance and prices of global oil as key indicators that will shape the economic outlook.
For instance, CBK highlighted that there was a drop in global oil prices for the week, occasioned by the proposed ceasefire between Israel and Hamas.
The conflict between the duo posed risks to the production and exportation of oil across the globe.
Notably, the International Monetary Fund (IMF) had expressed concern that the conflict would extend to the Middle East which is a major oil exporter.
"International oil prices declined during the week ending February 1, largely attributed to a ceasefire proposal that could put an end to the geopolitical tension between Israel and Hamas.
"Murban oil price declined to USD80.47 per barrel on February 1 from USD80.72 per barrel on January 25," read the report in part.
On the other hand, it was reported that the dollar had weakened against most currencies including the Shilling.
"It exchanged at Ksh160.67 per US dollar on February 1, compared to Ksh160.80 per US dollar on January 25," CBK reported.
Given that the fuel importers purchase the products in dollars, the cost of importation is expected to drop slightly.
Consequently, owing to the drop in global prices and dollar dominance, Kenyans could enjoy a further reduction in fuel prices in the coming weeks and months.
The Energy and Petroleum Regulatory Authority (EPRA) is expected to review pump prices on February 14.
Currently, Super Petrol retails at Ksh207.36, Diesel at Ksh196.47, and Kerosene at Ksh194.23 within Nairobi.
