Surging US Economy Sends Global Oil Prices Soaring Ahead of EPRA Assessment
International fuel prices rose for the second consecutive month, as reported in the weekly bulletin from the Central Bank of Kenya (CBK) released on Friday, January 26th.
The surge in prices occurred following several months of declining global fuel prices, and it was announced two weeks before the fuel review by the Energy and Petroleum Regulatory Authority (EPRA).
CBK observed that the surge in fuel costs was primarily linked to an unforeseen and significant expansion of the United States economy.
“International oil prices increased during the week ending January 25, largely attributed to faster than expected US growth in the fourth quarter as well as continued attacks and geopolitical risks in the Middle East,” the bulletin revealed.
Consequently, the Murban oil price increased to USD80.72 (equivalent to Ksh13,129) per barrel on January 25, up from USD78.47 (Ksh12,763) per barrel on January 18.
Murban oil primarily denotes unrefined petroleum originating from the Middle East, specifically from Abu Dhabi in the United Arab Emirates.
Significantly, Kenya purchases oil from the Abu Dhabi National Oil Company with a 180-day credit arrangement.
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CBK highlighted that the increase in fuel prices was prompted by the growth of the US economy, which reached an annual rate of 3.3 percent in the fourth quarter of 2023.
“The US dollar index strengthened by 0.03 percent against a basket of major currencies during the week ending January 25,” CBK noted.
Continued instability in the Red Sea, marked by recurrent attacks from Yemen-based Houthi rebels on ships, is also contributing to fluctuations in fuel prices.
On the 24th of January, Kenya, along with 20 other countries, expressed condemnation for the attacks.
In a collective declaration endorsed by Kenya, the United States, Canada, the United Kingdom, and various other nations, it was affirmed that the assaults by the Houthi group posed a danger to all countries dependent on global maritime transportation.
The announcement of updated fuel prices by EPRA is anticipated on February 14. Presently, Super Petrol is sold at Ksh207.36, Diesel at Ksh196.47, and Kerosene at Ksh194.23 in Nairobi.
Surging US Economy Sends Global Oil Prices Soaring Ahead of EPRA Assessment