Kenyans are preparing themselves for an increase in petrol costs as a result of Russia’s recent declaration that it would reduce its oil output by 500,000 barrels per day. Russia is the world’s third-largest producer of oil, and its lower supply is projected to raise demand and, therefore, prices.
According to Russia’s Deputy Prime Minister Novak Alexander, lower production might not only result in a lack of oil but could also extend to other areas of the global economy. Currently, the price of one liter of fuel in Kenya is Ksh47; however, owing to reduced supply, this is predicted to grow to Ksh67 per liter.
Kenyans are concerned that the country’s petroleum price would grow much higher than the estimated Ksh255 per liter. This is because Kenya now imports oil from Saudi Arabia at a cost of Ksh66 per liter, which is much more than the world average.
To avoid a dramatic spike in petroleum costs, the government may continue the subsidy scheme. However, President William Ruto’s administration has scrapped fuel subsidies, stating that it would benefit Kenyans in the long run. If the government continues its position on subsidies, the cost of living in the nation will rise since many companies depend largely on petrol and would be influenced by the increasing cost of manufacturing.
The Energy and Petroleum Regulatory Authority (EPRA) is due to publish the new pump pricing on 14th, February, and Kenyans are waiting with bated breath to learn what measures will be put in place to alleviate the consequences of Russia’s decreased oil output.