The Central Bank of Kenya (CBK) has announced a drop in global oil prices ahead of the Energy and Petroleum Regulatory Authority’s (EPRA) fuel review next week.
In its weekly bulletin published on Friday, February 7, the central bank revealed that international oil prices declined, with Murban oil falling to Ksh9,916 per barrel on February 6 from Ksh10,131 per barrel on January 30.
The regulator noted that oil prices on the international front dropped following the oil exporters resuming their usual production of more crude oil for importing countries.
It is worth noting that an increase or decline in the price of crude oil could lead to higher or lower retail fuel prices in most countries but fuel consumption is not impacted by changes in global crude oil prices.
Motorists at a petrol station in Kinoo along Waiyaki Way on January 7, 2023.
Kenyans.co.ke
However, a shift in international oil prices does not significantly affect Kenya since the country imports its oil under the Government-to-Government oil deal, which it entered into with four Gulf companies.
The impact is not dire for Kenya because the price set in the G-to-G deal is often based on a fixed premium above the prevailing global oil price, meaning fluctuations in the international market do not directly impact the cost of oil imports under the arrangement. The country pays a premium of around $90 (about Ksh11,610 in the current exchange rates) per barrel for petrol and $88 (about Ksh11,320 in the current exchange rates) per barrel for diesel, which is significantly higher than the global market price.
Similarly, when global prices drop, the G-to-G price may not adjust as quickly, potentially leading to higher costs for the importing country compared to buying on the open market
Meanwhile, according to the central bank, inflation concerns also remained stable during the week ending February 6, shedding off fears of a hike in fuel prices.
Despite the rise in inflation rates in some European countries, in January this year compared to December 2024, the core inflation rate remained unchanged at 2.7 per cent.
Additionally, the Kenya shilling also remained stable against major international and regional currencies during the week ending February 6. Data from the central bank revealed that the local currency exchanged at Ksh129.19 per US dollar on February 6, compared to Ksh129.25 per US dollar on January 30, 2025.
EPRA is expected to announce the month’s new fuel prices on February 14, with most Kenyans anticipating a drop in the prices due to favourable monetary policies including the stability of the local currency.
A drop in this month’s fuel prices could be a shift from last month’s review when the regulator increased the fuel prices. While announcing the changes on January 14, EPRA Director General Daniel Kiptoo said Super Petrol, diesel, and kerosene had increased by Ksh0.2, Ksh 2, and Ksh 3, respectively.
EPRA DG Daniel Kiptoo speaking during a stakeholders forum on February 5, 2024.
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EPRA