Global oil prices rose above $100 a barrel days before the Energy and Petroleum Regulatory Authority (EPRA) is to announce the September-October fuel prices.
Brent crude settled at $101.21 per barrel on September 9, its highest close since May, before trading at around $101.10 on Thursday.
The rally comes as disruptions to oil shipments through the Strait of Hormuz intensify amid the escalating US-Iran conflict, raising concerns about the supply of crude and refined petroleum products.
Brent Oil Climbs Above $100
Brent, the international benchmark used to price much of the world’s crude, rose 3.4% on Wednesday, gaining $3.29 to settle at $101.21. It had earlier touched $101.58 a barrel.
On Thursday morning, the benchmark remained above the $100 mark, with traders assessing the possibility of further supply disruptions from the Middle East. Brent has now gained nearly 30% from lows recorded in early August.
Rise in global oil prices is linked to attacks on shipping in and around the Strait of Hormuz. Before the conflict disrupted traffic, the waterway carried roughly one-fifth of global oil and gas supplies.
Also Read: EPRA Announces New Fuel Prices for August and September
Oil flows through the strait have fallen sharply, while attacks on shipping and energy infrastructure have increased concerns that disruptions could persist. The US Energy Information Administration has also raised its oil-price forecasts as global inventories decline.
Current Fuel Prices in Kenya
On August 14, EPRA announced maximum retail prices set under Kenya’s petroleum pricing framework for Super Petrol, Diesel and Kerosene.
In its review, the energy regulatory authority reduced Diesel by KSh5.00 per litre
In Nairobi, a litre of Super Petrol costs KSh214.03, diesel KSh217.86, and kerosene costs KSh191.38.
In Mombasa, the current prices are KSh210.87 for Super Petrol, KSh214.58 for diesel and KSh188.09 for kerosene. In Nakuru, petrol costs KSh212.92 and diesel KSh217.27, while Eldoret and Kisumu have petrol prices of KSh213.69 per litre.
What Kenyans Should Expect Before EPRA’s Review
Higher global crude prices affect Kenya’s fuel prices through the landed cost of petroleum imports. However, crude oil prices are not transferred directly to the pump.
Also Read: Global Oil Prices Fall One Week to EPRA Review
EPRA’s formula accounts for the weighted average cost of petroleum cargoes imported and discharged at the Port of Mombasa during the pricing period. The calculation also includes storage, transportation, financing, wholesale margins, taxes, retail transport costs, retail margins and VAT.
Under the regulations, the landed cost is based on petroleum imports handled between the 10th day of the previous month and the 9th day of the pricing month.
Consequently, the sustained rise in Brent prices could increase the import cost component EPRA uses. However, it is too early to state that petrol or diesel will definitely rise, since the final pump prices depend on all components of the pricing formula, including the exchange rate, taxes, levies, freight and other costs.
EPRA is expected to announce the new maximum retail prices on September 15, which will determine the prices motorists and households will pay for the following monthly pricing cycle.
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