14 October 2014, Nairobi – Fuel prices are expected to drop further when the regulator reviews the monthly caps later today, in line with global trends showing crude oil has touched a four-year low.
This would be the second downward review in a row by the Energy Regulatory Commission for diesel, petrol and kerosene. However, industry players say the impact on prices of consumer goods is likely to be delayed for supplies already in market shelves.
Crude oil is now trading below $90 per barrel for the first time since 2011. Brent crude oil was yesterday trading at $88.34 per barrel, West Texas Intermediate for $84.62, while OPEC reference basket price – an average cost of petroleum blends from OPEC countries – was priced at $86.43 on Thursday.
The more than 20 per cent price fall since June is attributable to oversupply in North America, weak demand in Asia and Europe, while oil-rich Middle East countries have been undercutting prices to maintain their global market share.
“The product that most marketers are selling is one-to-two months old,” Ahmed told the Star on phone.
“That means it could take another one or two months before the consumers feel the kind of the downward price effect in the global markets.”
In the last review, which expires today, super petrol prices were slashed by the highest margin of Sh4.98 per litre, kerosine by Sh1.42 and diesel by Sh0.62.
– The Star
