Middle East Tensions Fuel Fresh Kenyan Fuel Price Hike Threat

Middle East tensions are sending shockwaves through global energy markets, threatening to drive up fuel prices in Kenya next week. Brent crude has surged above $80 a barrel after the Houthi rebels claimed responsibility for a missile attack on a Saudi oil tanker near Yanbu. The benchmark reached a high of $100.69 per barrel on July 23 amid fears of supply disruptions and threats to shipping through the Strait of Hormuz.

The Energy and Petroleum Regulatory Authority (EPRA) is expected to announce the August-September fuel prices next week, with oil sector experts warning that last month's escalations could be felt in the next pricing cycle. Kenya imports all its refined petroleum products, making it vulnerable to external shocks.

Petroleum Outlets Association of Kenya (POAK) chairman Martin Chomba said commercial vessels are increasingly avoiding the Red Sea due to security risks, forcing shipping companies to reroute cargo around the Cape of Good Hope. This has increased freight charges, insurance premiums, and delivery times, raising the landed cost of petroleum products imported into Kenya.

The additional costs are expected to be reflected in EPRA's pricing formula if the current market conditions persist. Chomba warned that higher fuel prices would have ripple effects across the economy, making everyday goods more expensive for consumers.