Kenya's Energy and Petroleum Secretary, David Chirchir, has warned of a possible increase in petrol prices to Sh300 per liter, driven by the ongoing Israel-Gaza conflict and the global petroleum price surge. This comes despite the Central Bank of Kenya (CBK) reporting a decline in international oil prices, with Murban oil dropping from $90.23 to $87.24 per barrel.
The CBK's weekly bulletin highlighted a decrease in Murban oil prices, a key component of Kenya's imported refined petroleum products. Yet, Chirchir anticipates that the Middle East conflict could trigger a fresh increase in fuel prices due to potential disruptions in oil production and supply from major Middle East oil producers.
This concern is shared by the World Bank, which has issued a warning that the conflict could push oil prices to over $150 per barrel. This would pose a significant threat to global food security if sustained. Murban oil, produced in Abu Dhabi and favored by Kenya, is also popular in Asian markets such as China, India, and Japan.
Since President William Ruto's election in 2022, increased taxes on petroleum products and global pricing dynamics have led to steep fuel price hikes. This contradicts Ruto's promise of cheaper oil imports following a deal with two Asian countries. The escalating fuel prices have significantly impacted Kenyans' living standards, with super petrol retailing at Sh217.36 per liter in Nairobi.
High fuel costs have escalated living expenses and business operations, affecting goods' prices, household energy bills, and transport costs. Despite implementing a fuel stabilization mechanism and renegotiating freight and premium costs in the Gulf deal to protect consumers from rising prices, pump prices have continued to increase.
This situation has prompted Uganda, under President Yoweri Museveni, to switch its petroleum import partner from Kenya to a Bahrain company, citing high costs imposed by Kenyan middlemen. This presents a significant challenge for President Ruto's administration as Kenyans demand effective solutions to the high cost of living.
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