Kenyan motorists could soon get relief at fuel stations after global crude oil prices recorded a sharp decline. The drop followed easing tensions in the Middle East.
The latest CBK bulletin shows Murban crude oil prices fell to Ksh9,642 per barrel. The price had reached Ksh10,961 in the previous week.
The decline represents a drop of more than 12 per cent. It came after Iran, the United States and Israel reached a ceasefire agreement.
The agreement reduced fears of supply disruptions in global oil markets. Those concerns had pushed crude prices higher in recent weeks.
CBK said commodity prices generally declined during the week. The bank linked the movement to reduced geopolitical tensions.
Kenya Could Benefit
Kenya imports most of its petroleum products from international markets. Lower global crude prices could reduce import costs for the country.
A sustained decline could give room for lower pump prices. However, the impact depends on future reviews by EPRA.
The reopening of the Strait of Hormuz also eased market pressure. The route handles about 20 per cent of global crude oil shipments.
Kenya relies on petroleum supplies from Gulf countries through its government-to-government fuel programme. The arrangement involves suppliers linked to Saudi Arabia and the United Arab Emirates.
Energy Cabinet Secretary Opiyo Wandayi has previously explained that global price changes take time to affect local fuel costs. Kenya uses previous international benchmark prices when calculating pump prices.
This means consumers may feel the impact of the latest decline later. The August fuel review could reflect the reduced crude prices.
Relief Depends on Market Trends
Experts warn that fuel prices depend on several factors beyond crude oil costs. Exchange rates, taxes and other charges also affect pump prices.
If global oil prices remain low, Kenyan consumers could see cheaper fuel. The final outcome will depend on future market conditions and government decisions.
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