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OIL EXPORTS

Fuel prices in Kenya to rise as US-Iran oil wars intensifies

In Summary

• US is blaming Iran of using its oil revenue to fund Strait of Hormuz, an Islamic terrorist organisation.

• Countries will have to source for new import markets, pushing up demand hence increasing prices.

A fuel attendant busy at a Kobil petrol station in Nairobi.
A fuel attendant busy at a Kobil petrol station in Nairobi.
Image: FILE

The US sanctions on Iran oil are expected to take a toll on fuel consumers in Kenya, with prices likely to rise further.

In the latest Energy Regulatory Commission review for the period April 15 to May 14, prices of super petrol, diesel and kerosene in Nairobi were set at Sh106.60, Sh102.13 and Sh102.22, representing a sharp increase of Sh5.25, Sh5.52 and Sh2.76 per litre respectively from previous month review.

On April 24, US tightens sanctions on Iranian oil exports down to zero to avoid global price disruptions, a move that has already global fuel prices, with a barrel currently trading at a six month high of  Sh7,511 ($74)per barrel.

US is blaming Iran of using its oil revenue to fund Strait of Hormuz, an Islamic terrorist organisation.

US officials also reported that there were close to million barrels per day of Iranian crude oil left, and plenty of supply in the market to ease that transition and maintain stable prices.

Iran is one of the leading oil producers in the world, mostly exporting to large economies including Russia, China, Turkey, India and Japan.

This means these countries will have to source for new import markets, pushing up demand hence increasing prices.

The directive has begun to take effect in the country as Reuters reported the Kenyan shilling weakening at an average of 101.54  against the dollar on Wednesday on April 24 was due to dollar demand from the energy sector.

Commercial banks quoted the shilling at 101.50/70 per dollar, compared with 101.40/60 at Tuesday's close.

In previous month's review by ERC super petrol, diesel and kerosene in Nairobi retailed at Sh101.35, Sh96.61 and Sh99.46.