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In the coming months, Kenyans may face yet another increase in fuel prices, as international agencies have revealed a decline in global oil inventories. This imbalance between supply and demand has led to a shortage of crude oil in some states, resulting in higher prices at the pump.

According to reputable sources such as Reuters, economists project that the price of crude oil could rise from the current Ksh11,978 per barrel to Ksh12,834 in the near future. The root cause of this shortage can be traced back to Saudi Arabia's decision to significantly reduce its oil production. As the leader of the Organization of the Petroleum Exporting Countries (OPEC), Saudi Arabia's move has had a profound impact on global oil prices.

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In July, Saudi Arabia and Russia both announced plans to cut their oil exports, aiming to improve the prices per barrel. Saudi Arabia committed to reducing its daily production by up to 1 million barrels in July and August, bringing its total production down to 9 million barrels per day. Russia also intended to slash over 500,000 barrels per day in August.

This shortage comes at a time when fuel prices in Kenya have already experienced a steady increase following President William Ruto's decision to raise the Value Added Tax (VAT) on fuel from 8% to 16%. Effective on July 1, the price of Super Petrol rose by Ksh13.49 to reach Ksh195.53 per liter, while Diesel increased by Ksh12.39 to retail at Ksh179.67. Kerosene now retails at Ksh173.44.

Should oil prices escalate further, the Energy and Petroleum Regulatory Authority (EPRA) is likely to review its own pricing, potentially pushing prices across the Ksh200 mark. Commuters who rely on public transport are already feeling the effects of continuously rising matatu fares, with the Kenya National Bureau of Statistics reporting a 40% surge in fares between July 2022 and July 2023.

EPRA's Director General, Daniel Kiptoo, previously mentioned that the authority has limited control over global oil prices since they are influenced by international market dynamics. However, EPRA is committed to ensuring efficiency in the pricing structure and passing any benefits or losses on to the consumers.

It is important for Kenyans to be prepared for potential future increases in fuel prices as the global oil inventories continue to decline. Monitoring EPRA announcements and exploring alternative means of transportation may help mitigate the impact of rising fuel costs.