The new Kenyan President, William Ruto did away with the fuel subsidy that was put by the former president Uhuru Kenyatta a few months ago. This move saw petroleum prices increase significantly. Super petrol, for instance, now costs Ksh.175 per litre. This may have increased the cost of living, but it has also saved the country about 14 billion Kenyan shillings.
When the subsidy was scrapped, people knew for sure that petroleum prices would cross the Ksh.200 line. Calculations estimated the price to be at Ksh.214. However, this was not the case since the cost fell below the estimated price. Petroleum is an important product in the economy and most of the time, dictates the prices of commodities. Commodity prices have this tendency of going up if the prices of petroleum are high.
In the months ahead, we are anticipating a reduction in the price of petroleum prices. It will cost even lower than the current prices. The global petroleum prices were adversely affected by the situation in Russia and Ukraine. Whatever is contributing to the reduced prices in the future is the global trend. International crude oil prices are currently falling. Furthermore, the outlook for new global refinery capacity is positive. Several large facilities are coming online making it easier to process more oil into petrol and diesel, which again increases supply and lowers prices. There is a glimpse of hope in the future. Find more information here, https://www.rte.ie/brainstorm/2022/0819/1316708-petrol-prices-oil-supply-refinery-capacity-recession/.
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