Kenyans are now in fear of digging deeper into their pockets as Russia’s oil supply cut is expected to cause a global shortage in the next few months.
Alexander Novak, the Deputy Prime Minister of Russia, revealed that Moscow intends to cut its oil production from March 2023 by 500,000 barrels per day, which is 5% of its total output. So, how will this affect prices in Kenya?
Analysts argue that while Kenya does not import her oil from Russia, the drop in supply of Russian oil will lead to worldwide competition for oil from other exporters such as the Middle East (which is Kenya’s leading supplier) that the UK, Europe, and other West countries badly need.
Read: KCB Pumps Ksh120 Billion To Support Oil Marketing Firms In Petroleum Imports
According to analysts, any reduction in the global oil supply will come at a very tricky time adding to the already high demand for oil. Remember, Russia is the third-largest oil producer in the world after the US and Saudi Arabia, which means that the pool of oil supply will be greatly affected.
The cutting production announcement was made after Western countries imposed price caps on Russian oil and products to weaken her ability to fund the war against Ukraine.
Read: Activists Publish List Of Ukrainian Civilians Abducted By Russian Forces
Kenya has been seeing an exponential rise in fuel prices with the current price of super at ksh.177.3 per litre, ksh.145.9 for diesel, and ksh.162 for kerosene.
This means that over the next reviews in the coming months, EPRA might increase the prices due to this effect. Unless the Kenya Kwanza plans to re-introduce the fuel subsidies, Kenyans should be ready to dig deeper into their pockets!
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