The Central Bank of Kenya (CBK) has announced that the international oil prices increased in the last week of May 2024.
In its weekly newsletter, CBK said the prices rose by Ksh150.075 before a meeting by Organization of the Petroleum Exporting Countries (OPEC+) held on Sunday, June 2, 2024.
CBK said murban oil prices increased from Ksh10,909 to Ksh11,059 per barrel between 23rd and 30th of May.
“International oil prices rose during the week ending May 30 attributed to growing global demand. Murban oil price increased to USD 84.75 (Ksh11,059.88) per barrel on May 30 compared to USD 83.60 (Ksh10,909.80) per barrel on May 23 in anticipation of the OPEC+ meeting scheduled for June 2, 2024,” CBK said.
OPEC+ Agreement on Oil Prices
In the meeting, OPEC+ agreed to extend output cuts announced in April 2023 through to December 2025, a move that will keep prices high throughout the current year.
The alliance announced that the decision aimed to boost stagnant prices, which have remained low despite the ongoing conflict in Gaza and attacks on shipping vessels in the Red Sea.
The decision comes as oil prices hover around $80 (Ksh10,440) per barrel, which is less than what many OPEC+ members need to balance their budgets.
Additionally, concerns about slow demand growth in China, the world’s largest oil importer, and increasing oil stocks in developed countries are keeping prices down.
Saudi Arabia & Russia Effect
Saudi Arabia, which dominates the alliance, needs money as it embarks on diversifying its economy away from fossil fuel exports.
Besides, higher oil prices would also allow fellow OPEC+ member Russia to maintain economic growth and stability as it spends heavily on its war against Ukraine.
The current members of OPEC are- Saudi Arabia, United Arab Emirates, Kuwait, Iraq, Iran, Algeria, Libya, Nigeria, Congo, Equatorial Guinea, Gabon, and Venezuela.
Non-OPEC countries in the global alliance of OPEC+ are represented by Russia, Azerbaijan, Kazakhstan, Bahrain, Brunei, Malaysia, Mexico, Oman, South Sudan and Sudan.
Also Read: Govt Unveils Plan to Reduce Cooking Oil Prices
EPRA May-June Fuel Prices
In its last review, the Energy and Petroleum Regulatory Authority (EPRA) reduced fuel prices for the period between May 15 and June 14, 2024.
In Nairobi, super petrol is retailing at Ksh192.84, diesel at Ksh179.18, and kerosene at a maximum of Ksh168.76 per liter.
This marked a reduction in the cost of super petrol by Ksh1 compared to the period between April 15 and May 14.
The price of diesel and kerosene also decreased by Ksh1.2 per liter and Ksh1.30 per liter, respectively.
Also Read: Prices of Spinach, Kales, & Tomatoes Hike as Inflation Rate Rises to 5.1%
KNBS May Inflation Rates
The CBK’s newsletter followed the Kenya National Bureau of Statistics (KNBS) publication of inflation rates and prices of select commodities throughout May.
KNBS reported that the overall year-on-year (annual) inflation rate, as measured by the Consumer Price Index (CPI), stood at 5.1 percent in May 2024.
“This is an increase from an inflation rate of 5.0 percent recorded in April 2024. The month of May 2024 recorded a monthly inflation rate of 1.0 percent,” KNBS said.
The rise in annual inflation was mainly due to an increase in prices of commodities under the Transport Index, Housing, Water, Electricity, Gas and Other Fuels Index, and Food and Non-Alcoholic Beverages Index.
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