Petroleum Outlets Association of Kenya (POAK) Chief Executive Officer John Njogu on Friday September 15 elaborated why the fuel prices have gone up.
According to the Njogu, the William Ruto led Government is justified as to why the prices went up considering the factors in play.
He claimed that the soaring prices were predicted because factors such as the Dollar exchange rate had clearly impacted international trade.
Njogu specifically stated that the month of August 2023 saw the Kenyan Shilling dramatically decline against the US Dollar, which is currently trading at roughly Ksh150 per American Dollar.
“This has made imported fuel more expensive in Kenya. This means that Kenyan importers have to pay more shillings for imported oil, and it will definitely reflect at the pump where motorists will bear the cost.
“A weakening Shillings also made it more expensive for the Kenyan government to service the debt owned to Gulf nations for deferred payments for imported oil”. Said the Petroleum Outlets Association of Kenya CEO.
He added that repaying foreign currency debt costs additional Shillings, and in Kenya’s instance, the government was caught between serving deferred payments and calling for fresh imports.
“The weakening of Kenyan shillings also has a general impact on local products including inflation of petroleum products. This is because imported goods and services become more expensive, which pushes up the prices of domestic goods and services.”
Njogu went on to say that the government should consider policy actions to keep the currency rate stable.
He also stated that the price of crude oil has risen dramatically on international markets due to a variety of causes such as the Russia-Ukraine conflict, supply chain interruptions, and rising demand.
“The price of crude oil is the main driver of fuel prices. Crude oil prices have been rising in recent months, and it’s obvious that the same may continue to happen in the foreseeable future,” said the CEO.
Kenyans have expressed mixed reactions in regard to the hike of fuel prices. According to the latest poll done by Infotrak, the country is almost split as to weather it is heading to the right direction or not.
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