International crude oil prices have dropped sharply ahead of next week’s monthly fuel price review by the Energy and Petroleum Regulatory Authority (EPRA), raising expectations that Kenyan motorists could see lower pump prices if the decline is reflected in the regulator’s calculations.
The latest Central Bank of Kenya (CBK) Weekly Bulletin shows that Murban crude oil prices fell to US$72.54 (KSh9,384.97) per barrel on August 6, down from US$78.24 (KSh10,120.54) a week ealier.
The decline represents a significant movement in global oil markets and comes just days before EPRA is expected to announce new fuel prices for the period beginning August 15.
Prices Fall Amid Global Uncertainty
According to CBK, commodity prices recorded mixed movements during the week, with crude oil prices declining while gold prices increased amid continued uncertainty in international markets.
“Commodity prices recorded mixed movements, with Murban crude oil prices declining to USD 72.54 per barrel on August 6, from USD 78.24 per barrel on July 30, amid heightened Middle East tensions,” CBK said.
The central bank attributed the movement to global market developments as inflation risks remained elevated in advanced economies.
The decline comes against the backdrop of renewed tensions around the Strait of Hormuz, a crucial route for global oil shipments.
Kenyans Await August EPRA Fuel Prices
The latest oil price movement will be closely watched by Kenyan motorists as EPRA prepares to announce its next monthly fuel prices.
In its previous review, EPRA retained pump prices for the period between July 15 and August 14, shielding consumers from some of the effects of fluctuations in international markets.
Under the current prices in Nairobi, a litre of Super Petrol retails at KSh214.03, Diesel at KSh222.86, and Kerosene at KSh191.38.
The regulator said the government had continued intervening to cushion consumers against international oil price shocks.
The government also extended the 8% VAT on petroleum products for another three months to October 2026 and used KSh945 million from the Petroleum Development Levy Fund to help stabilise pump prices.
Imported Fuel Costs Already Declined
The previous EPRA review also showed a substantial reduction in the average landed cost of imported petroleum products.
The landed cost of super petrol fell by 21% to KSh115,070 per cubic metre, while diesel declined by 19.8% to KSh127,700 per cubic metre.
Kerosene recorded an 11.7% decline to KSh133,370 per cubic metre.
The latest fall in global crude prices could therefore provide additional pressure for lower domestic fuel prices, although the final pump prices will depend on several factors used in EPRA’s monthly pricing formula, including the exchange rate, landed costs, taxes and levies.
Shilling Remains Stable Against Dollar
The CBK bulletin also showed that the Kenyan shilling remained broadly stable against the US dollar during the week.
The shilling traded at KSh129.41 per US dollar on August 6, compared with KSh129.40 a week earlier.
Kenya’s foreign exchange reserves stood at KSh1.97 trillion, equivalent to US$15.25 billion or 6.3 months of import cover.
The money market also remained liquid, with Treasury bill demand exceeding the amount offered, while Kenya’s Eurobond yields declined.
The combination of falling international crude prices and a relatively stable shilling could offer some relief to Kenyan consumers if the favourable trends are sustained and reflected in EPRA’s upcoming review.
However, motorists will have to wait for EPRA’s official announcement to know whether petrol, diesel and kerosene prices will actually fall.
