Energy CS Davis Chirchir believes that the conflict between Israel and Hamas could worsen global fuel shortages and increase the price of Super Petrol to Ksh. 300 per litre.
In Kenya, the cost of fuel reached an all-time high in the middle of October, rising by Ksh. 5.72 ($0.04) for a litre of petrol and Ksh. 4.48 ($0.03) for diesel. Kerosene, however, increased by Ksh.2.45 ($0.02).
In his testimony before the National Dialogue Committee (NADCO) on Monday, CS Chirchir stated that the cost of petroleum products has increased from Ksh.
10,584 (70 USD) to Ksh. 13,608 (90 USD) per barrel, and that given the ongoing conflict, things may get worse.
According to CS Chirchir, "There is nothing we can do to stop the global petroleum price increase, which has caused a barrel of oil to go from 70 to 80 dollars and then 90 dollars."
It is feared that rising tensions in the area could jeopardise central bankers' attempts to contain high inflation by obstructing a vital transit route for seaborne cargoes of petrol and oil from the Middle East to the international market.
A 6–8 million barrel per day reduction in the world's oil supply could drive prices down to between $140 and $157 per barrel if major Arab producers like Saudi Arabia stopped exporting.
A Financial Times story that the CS cited states that rising international prices are expected, with a potential price per barrel of USD 150.
And prices are probably going to rise to USD 150 per barrel, according to a recent Financial Times article he read, he continued.
We hope it does not reach the Ksh. 300 per litre mark, as that would mean our products would reach that high.
According to CS Chirchir, inflation and the US dollar's stronghold on the oil market are two of the problems that are making fuel prices worse. Inflation has also led to a decline in the value of the Kenyan shilling.
"Perhaps other nations pay three hundred dollars per litre for petroleum products, but Kenya only pays two hundred dollars per barrel," CS Chirchir continued.
Four loads of diesel, four loads of petroleum and one load of kerosene are among the 500 million USD worth of goods we import.
CS Chirchir stated that to lessen the uncontrollably high cost of fuel, the government has inked memorandums with nations like Saudi Arabia and Abu Dhabi, which possess substantial amounts of the world's oil reserves, as opposed to having to pay for the purchase of petroleum products after each shipment to Mombasa.
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