7 Game-Changing Shifts in Petroleum Set to Shake Up EPRA Fuel Costs
Numerous changes within the petroleum sector are poised to impact the assessment of fuel costs carried out by the Energy and Petroleum Regulatory Authority (EPRA) on Sunday, January 14th.
These elements affect both the domestic and global markets, ranging from reduced worldwide prices to evaluations of Kenyan CEOs carried out by the Central Bank of Kenya (CBK).
Saudi Aramco Reduces Global Prices for Select Continents
On Sunday, Saudi Aramco, the primary fuel provider in the country, declared a historic reduction in fuel prices for its Asian customers, marking the lowest levels seen in the last 27 months.
In a company announcement, Aramco mentioned that they reduced the official selling price of the Arab Light crude oil type to Asia by Ksh317 per barrel.
Saudi Aramco reduced prices for Europe and the US but not for Africa. Nonetheless, analysts anticipate that Africa might experience similar price reductions in the future.
Aramco Drops Kenyan Company in G2G Deal
Nevertheless, on January 9, 2024, it was claimed in reports that Aramco had excluded Oryx Energies (a Kenyan OMC) as one of its domestic diesel importers in the fuel deal conducted between governments.
However, Aramco substituted Oryx with Asharami & One Petroleum during the alterations implemented last December.
Global Prices Drop
Worldwide oil prices have consistently declined since November of the previous year. On Wednesday, January 10, the global standard Brent crude oil was being exchanged at $79.94 per barrel, marking a 0.08% decrease from its previous price of $80.
CBK Acknowledges Drop in Global Prices
In December of the previous year, the Central Bank of Kenya verified a historic decrease in worldwide oil prices, which was attributed to reduced oil demand in both 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.
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EPRA uses the CBK dollar-to-shilling exchange rate to review fuel prices.
CEOs Warn of Higher Fuel Prices
Although positive updates were shared in multiple reports, CEOs from diverse companies across various industries in the nation forecasted an increase in fuel costs during the initial quarter of 2024.
As per CBK’s survey of CEOs, the decline of the shilling, currently at Ksh157.50 per dollar, will have an impact on import deals conducted in USD.
Houthi Revolution in the Red Sea
Domestic producers in the nation have just revealed intentions to increase the prices of their products due to delays in imports caused by the Houthi attacks and the obstruction of the Suez Canal.
The Houthi group, backing Hamas in Palestine, faced accusations of targeting ships in the Red Sea that were believed to be en route to Israel. This action disrupted the flow of goods to Kenya, a country heavily reliant on the Suez Canal for its imports.
Tanzania Lowers Fuel Prices
As Tanzania benefits from reduced fuel costs, Kenyans are optimistic that EPRA will deliver positive updates. Tanzania’s decision to decrease prices was influenced by the decline in global fuel prices.
Gasoline, diesel, and kerosene are sold at Ksh193.52 (Tsh3,084), Ksh193.14 (Tsh3,078), and Ksh218.56 (Tsh3,510) respectively in the nearby nation.
In Kenya, the current prices for gasoline, diesel, and kerosene are Ksh212.36, Ksh201.47, and Ksh199.05, respectively, at retail.
7 Game-Changing Shifts in Petroleum Set to Shake Up EPRA Fuel Costs