The Price of Brent Oil has shot up above $70 a barrel, a high last seen in June 2019. The price hike is as a result of the US-Iran tension following the killing of Iran’s military leader, Qasem Soleimani, by the US.
The jump in global oil price is expected to trickle down to countries that rely on oil imports. Kenya is one of the countries that depends on oil imports from the Middle East countries.
In 2018, Kenya’s largest oil supply came from Saudi Aradia and the United Arab Emirates (UAE) according to the Kenya National Bureau of Statistics (KNBS). Kenya purchased KSh132.6 billion of Petroleum Products from Saudi Arabia and KSh116.9 billion of oil imports from UAE.
Fuel prices in Kenya are set by the Energy and Petroleum Regulatory Authority. In mid December, the regulator revised down the price of a liter of Petrol and Diesel in Nairobi to KSh109.50 and KSh101.78 respectively. Fuel prices are expected to go up in the near term, given the tension between US and Iran.
A rise in the cost of fuel will lead to increased cost of goods and therefore push up inflation. However, international observers predict that the global community will step in to reduce the tension between US and the Middle East and therefore lessen the volatility in international fuel prices.