Fuel prices could hit Sh300 on Israel-Hamas war, Energy CS Davis Chirchir warns

Epra fuel prices review

Fuel prices could hit a historic Sh300 per litre in Kenya should the war between Israel and Hamas continue.

Photo credit: Nation Media Group

Fuel prices could hit a historic Sh300 per litre in Kenya should the war between Israel and Hamas continue, Energy and Petroleum Cabinet Secretary Davis Chirchir has said.

While appearing before the ongoing National Dialogue Committee hearings, Mr Chirchir on Monday said that while rising fuel prices are a global issue, the government's interventions had mitigated a further rise in pump prices.

"We can't do much on international pricing of petroleum. I read an article that international (crude) prices could go to $150 (per barrel) because of the Israel - Hamas war, which would literally mean our products going to a high of Sh300 per litre at the pump. We hope it doesn't get there," said the CS.

Analysts have observed that the conflict, which broke out last month, could see the US put tighter sanctions on Middle-East oil producers seen as backers of Hamas, which could reduce the global crude supply.

This mirrors the Russia-Ukraine war which broke out in February last year, sending fuel prices to new highs amid global supply hitches that also affected grain shipment from Ukraine.

According to Mr Chirchir, President William Ruto’s government has renegotiated another government-to-government oil deal between Kenya and Gulf countries— Saudi Arabia and the United Arab Emirates (UAE) — to lower fuel premiums.

"The G-to-G has eased pressure on the Kenyan shilling by reducing the rate depreciation from three per cent per month to one per cent," said Mr Chirchir.

 This comes even as the Energy and Petroleum Regulatory Authority (Epra) prepares to announce new fuel prices next week. It also comes at a time when Kenyans are paying a record high for fuel, following last month's prices review by the energy regulator.

During the review for the October-November cycle, Epra increased the prices of petrol by Sh5.72 per litre, that of diesel by Sh4.48, and kerosene by Sh2.45.

This pushed petrol prices in Nairobi to a record high of Sh217.36 per litre, with diesel selling at Sh205.47 and kerosene at Sh205.06. In Mombasa, the three products are retailing at Sh214.3, Sh202.41 and Sh201.99, respectively.

This was a significant increase from previous prices where petrol was selling at Sh211.64 per litre in Nairobi, diesel at Sh200.99 and kerosene at Sh202.61.

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