Nairobi News

Cabinet Secretary for Energy and Petroleum, Mr Davis Chirchir, has announced that the price of a liter of petrol could shoot to Sh300, an increase of up to Sh83, if the Energy and Petroleum Regulatory Authority announces new prices next week.

Speaking before the National Dialogue Committee, Chirchir claimed that this price hike in petroleum products has ben caused by the Israel-Gaza war in Asia.

“We cannot do anything about the global pricing of petroleum which has soared from $70 per barrel to $80 and then to $90. And I read an article recently in the Financial Times recently that prices are likely to go up to $150 per barrel. That would literally mean our products going to the highs of Sh300 per litre, but we hope it does not get there,” said CS Chirchir.

However, Central Bank of Kenya differed with Chirchir’s claims that the Israel-Hamas war is the reason for price hikes in petroleum products.

, the  against this position.

Also read: Museveni now promises fairly priced fuel in Western Kenya

In their Weekly Bulletin released on November 3, 2023, on their website, the CBK found that fuel prices were actually decreasing and not increasing.

“International oil prices declined during the week ending November 2, due to the dissipating impact of the war between Israel and Palestine. Murban oil price declined to $87.24 per barrel on November 2 from $90.23 per barrel on October 26,” CBK said.

CBK further reported that inflation was falling in advanced economies in the week ending November 2, 2023, further arguing against Chirchir’s position of inflation increasing and affecting global pricing of petroleum products.

“Inflation concerns in advanced economies continue to moderate, with inflation in the Eurozone falling to 2.9 per cent in October from 4.3 per cent in September. The US Federal Reserve held benchmark interest rates steady in a target range of 5.25% – 5.5%, where it has been since July. The US dollar index weakened by 0.48 per cent against a basket of major currencies during the week ending November 2,” CBK said.

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Since President William Ruto was elected to office in August 2022, fuel prices in Kenya has been steeply increasing due to new and increased taxes on petroleum products, and global pricing in some instances.

Chirchir’s announcement that petrol prices will increase to Sh300 also counter President Ruto’s claims that the cost of fuel in Kenya will decrease after he signed a government to government deal with two Asian oil producing countries – in a deal expiring in December 2024- to export oil to Kenya at cheaper landing rates.

This move effectively also saw Uganda drop Kenya as a petroleum import partner and sign a five year deal with a Bahrain company to import the products via Tanzania.

President Yoweri Museveni of Uganda accused Kenyan middle men of inflating the cost of fuel upon landing in Kenya and selling it to Uganda at steep prices.

“A check on one occasion a few months ago, showed that the (Kenyan) middlemen were selling us petroleum products at prices as indicated below per tonne: 1. Diesel: I. Middlemen’s price – $118; II. Price from bulk suppliers or Refiners -$83; 2. Petrol: I. Middlemen’s price -$97.5; II. Bulk suppliers or Refiners’ price- $61.5; 3. Kerosene: I. Middlemen’s price – $114; II. Bulk suppliers or Refiners’ price – $79,” said President Museveni on November 5, 2023.