Kenya’s major fuel supplier, Saudi Aramco, on Sunday, lowered February oil prices for its customers to the lowest level in the last 27 months.
Asia, Europe and the United States were among the first beneficiaries of the lowered global prices, with Africa yet to be targeted.
The recent move by Saudi Aramco, which supplies fuel to Kenya on a six-month credit, has thus sparked hope among Kenyan consumers who anticipate price changes in the near future.
According to a statement issued by the company, the official selling price (OSP) for February for the crude oil variant Arab Light to Asia was lowered by Ksh 317 ($2) a barrel.
An oil tanker, Mt Frixos, discharges crude oil at Kipevu terminal at the port of Mombasa
Owing to the price cuts made on Monday, crude oil prices declined by 4 per cent In the United States.
According to reports made by Reuters, the drop in crude oil prices was necessitated by refineries who argued that Saudi’s oil exports are more expensive in comparison to other Gulf countries.
“Saudi crude is still relatively more expensive compared to other regional crude. But we are happy enough to see such prices, making it much more affordable for us,” said a trader with a North Asian refinery.
Further reports indicated that Aramco was pushed to cut global prices as it struggles to maintain its significant share in the market, while at the same time limiting the amount of oil produced to raise prices.
Currently, the deal signed by Kenya and Saudi Aramco in 2023 to supply the country with crude oil is expected to run until December 2024 after the government signed an extension in September last year.
Kenya and Saudi Aramco signed a partnership deal in March 2023 that allowed the country to pay for fuel on credit. The deal was signed in a bid to reduce the demand for the dollars as Kenya was grappling with a depreciating shilling.
Over the past weeks, oil prices have been decreasing globally, with the last fuel price review by the Energy and Products Regulatory Authority in Kenya being on December 14, 2023.
EPRA reduced fuel prices by Ksh5 per litre for Super Petrol, while Diesel and Kerosene were reduced by Ksh2 and Ksh4, respectively.
On January 14, the agency will announce new prices from Ksh212.36 for petrol, Ksh201.47 for diesel, and Ksh199.05 for Kerosene per litre, respectively unveiled on December 14.
A fuel attendant in Kenya.