The Central Bank of Kenya (CBK) has revealed that global oil prices have declined ahead of the Energy and Petroleum Regulatory Authority (EPRA) September- October review.
In its weekly Bulletin on September 13, CBK said international oil prices declined marginally during the week ending September 12, reflecting a slowdown in global oil demand.
“The Murban oil price declined to USD 72.34 (Ksh 9,295.69) per barrel on September 12 from USD 72.99 (Ksh 9,379.22) per barrel on September 5,” CBK stated.
According to the bulletin, global inflation concerns have continued to ease. The US headline inflation declined to 2.5 percent in August 2024 from 2.9 percent in July.
The European Central Bank also lowered its policy rate by 25 basis points to 3.5 percent.
Additionally, international oil prices declined in August due to concerns about reduced demand.
The price of Murban oil dropped from USD 84.48(Ksh10,855.68) to USD 81.70( Ksh 10,498.45).
EPRA’s August-September Oil Prices
EPRA in the August cycle, maintained the previous prices for Petrol, Kerosene and Diesel for the period between August 15 and September 14, 2024.
In its monthly review report released on August 14, EPRA announced that the maximum allowed petroleum pump price for Super Petrol, Diesel and Kerosene would remain unchanged.
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According to the report released on August 14, Super Petrol, Diesel and Kerosene were to retail at Kshs.188.84, Kshs.171.60 and Kshs.161.75 per liter respectively in Nairobi.
According to EPRA, the average landed cost of imported Super Petrol decreased by 1.06% from $716.03 per cubic metre in June 2024 to $708.47 per cubic metre in July 2024.
In contrast, the cost of Diesel increased by 1.62% from $682.73 per cubic metre to $693.82 per cubic metre. Kerosene also saw an increase of 1.87%, rising from $692.80 per cubic metre to $705.74 per cubic metre.
Kenya Shilling Stabilizing
Meanwhile, the US dollar index weakened by 0.3 percent against a basket of major currencies during the week ending September 12.
The Kenyan Shilling remained stable against major international and regional currencies during the week ending September 12
It exchanged at Ksh 129.18 per US dollar on September 12, compared to Ksh129.19 per US dollar on September 5.
Traders noted that the Kenyan shilling was flat on Thursday, September 12, even as foreign currency demand saw a slight increase.
“We’re seeing some increased (dollar) demand from oils and corporates, but generally we’re stuck within a range. It’s likely to stay that way for the next few days,” one trader said.
“The shilling has reached a stable zone.”
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Money Market
Liquidity in the money market remained adequate during the week ending September 12, supported by open market operations.
Commercial banks’ excess reserves stood at Ksh 13.8 billion in relation to the 4.25 percent cash reserves requirement (CRR).
The average interbank rate was 12.66 percent on September 12 compared to 12.59 percent on September 5.
During the week, the average number of interbank deals increased to 52 from 47 in the previous week, while the average value traded increased to Ksh34.2 billion from Ksh 25.5 billion in the previous week.
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