Global oil prices eased in the week ending Friday, June 5, ahead of Kenya’s next fuel price review by the Energy and Petroleum Regulatory Authority (EPRA), according to a Central Bank of Kenya (CBK) weekly bulletin.
The CBK bulletin published Friday shows that international crude oil prices dropped slightly during the week, with Murban crude falling to about USD 87.38 per barrel from USD 88.48.
According to the bulletin, international crude markets softened as investors reacted to renewed optimism over global negotiations that could help stabilize supply flows and reduce disruption risks.
Global Oil Prices Fall Ahead of Review
At the same time, expectations of steady oil output from major producers helped ease pressure on prices, as markets adjusted to a more balanced supply-and-demand outlook.
“International oil prices fell as investors responded to renewed optimism surrounding the ongoing U.S.-Iran peace negotiations. Murban crude oil price decreased to USD 87.38 per barrel on June 4, from USD 88.48 per barrel on May 28,” read the report in part.
Despite the decline, prices remain high, a trend expected to continue influencing domestic fuel costs in import-dependent economies such as Kenya.
According to CBK, the energy and transport components were key drivers of inflation in May 2026.
Overall inflation rose to 6.7 percent from 5.6 percent in April, largely driven by higher energy prices and transport costs arising from elevated global oil prices.
The report further shows that non-core inflation increased to 16.0 percent from 13.4 percent, reflecting sharp increases in volatile items such as fuel, while core inflation rose to 3.2 percent from 2.8 percent over the same period.
“Overall inflation increased to 6.7 percent in May 2026 from 5.6 percent in April 2026, mainly driven by higher energy prices and transportation costs arising from the elevated global oil prices,” CBK noted.
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CBK further highlighted that exchange rate stability has helped cushion the impact of imported fuel costs.
The Kenyan shilling remained stable at around Ksh 129.37 against the US dollar, meaning there was no additional pressure from currency depreciation on fuel imports.
Since Kenya imports refined petroleum products in US dollars, a stable or strengthening shilling helps cushion the impact of global oil price movements, while a weaker shilling increases landing costs even when crude prices decline.
The timing of the decline comes just days ahead of EPRA’s next fuel price review, with global oil movements remaining a key determinant of domestic pump prices.
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Wandayi Cites Global Geopolitical Tensions as Fuel Prices Remain Elevated
In a statement on Friday, Energy Cabinet Secretary Opiyo Wandayi said global oil markets remain volatile due to geopolitical tensions, including ongoing conflicts that have pushed up the cost of crude oil and related logistics.
He noted that fuel imported through the Port of Mombasa is priced based on a combination of factors, including the purchase price on international markets, freight charges, insurance costs, and trader margins, collectively referred to as premiums.
Wandayi said current prices remain elevated due to ongoing global instability, particularly driven by the US-Iran conflict.
The CS added that additional costs, such as freight and premiums, significantly influence the final landed cost of fuel.
According to him, these costs have also risen in recent months, further increasing pressure on fuel prices in importing countries like Kenya.
Meanwhile, Wandayi has reassured that EPRA would implement a Ksh10 reduction in diesel prices.
