Energy CS Davis Chirchir has highlighted concerns that the Israel-Hamas conflict may contribute to a further surge in global fuel prices, potentially pushing the cost of a liter of Super Petrol to Ksh.300. In Kenya, fuel prices reached a record high in mid-October, with petrol increasing by Ksh.5.72 ($0.04), diesel by Ksh.4.48 ($0.03), and kerosene by Ksh.2.45 ($0.02).
During his testimony before the National Dialogue Committee (NADCO), CS Chirchir stated that petroleum product prices have risen from Ksh.10,584 (70 USD) per barrel to Ksh.13,608 (90 USD) per barrel. He emphasized the challenges of global petroleum pricing, which escalated from 70 to 80 and then 90 dollars per barrel.
The escalating tensions in the region raise concerns about potential impacts on oil prices, as a key transit route for oil and gas from the Middle East to the global market could be affected. If major Arab producers reduce exports, global oil supply might decrease by 6 to 8 million barrels per day, potentially leading to prices between $140 and $157 per barrel. According to a Financial Times article cited by CS Chirchir, international prices could reach USD 150 per barrel.
CS Chirchir expressed hope that prices do not reach the projected highs of Ksh.300 per liter in Kenya. He attributed the increasing fuel prices to factors such as inflation, causing the depreciation of the Kenyan shilling, and the impact of the US dollar on the oil market.
Highlighting Kenya’s payments of 200 USD per barrel for petroleum products compared to other countries paying 300 USD per liter, CS Chirchir mentioned the government’s efforts to address the situation. Instead of paying for each shipment to Mombasa, Kenya has signed memoranda with oil-rich countries like Saudi Arabia and Abu Dhabi to mitigate rising fuel prices.
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