CBK Signals Possible Drop in Fuel Prices as Global Oil Costs Fall Ahead of EPRA Review

CBK Signals Possible Drop in Fuel Prices as Global Oil Costs Fall Ahead of EPRA Review

Kenyan motorists and households could soon experience relief at the fuel pump after the Central Bank of Kenya (CBK) reported a decline in global oil prices ahead of the upcoming Energy and Petroleum Regulatory Authority (EPRA) fuel price review.

The development has raised expectations of lower fuel costs in the coming pricing cycle, with analysts noting that falling international crude oil prices, coupled with a stable Kenyan shilling, could create favorable conditions for a reduction in local pump prices.

In its weekly market bulletin released on Friday, June 5, the Central Bank indicated that global oil markets recorded a decline during the week ending June 4, largely driven by renewed optimism surrounding ongoing diplomatic engagements between the United States and Iran.

According to the bank, Murban crude oil, one of the key international benchmarks used in pricing petroleum products, fell from USD 88.48 (approximately KSh11,457) per barrel on May 28 to USD 87.38 (about KSh11,315) per barrel on June 4.

The drop translates to a reduction of roughly KSh142 per barrel over the review period.

“International oil prices fell as investors responded to renewed optimism surrounding the ongoing U.S.-Iran peace negotiations. Murban crude oil price decreased to USD 87.38 per barrel on June 4, from USD 88.48 per barrel on May 28,” CBK stated in its report.

The decline comes at a critical time as EPRA prepares to announce revised fuel prices on June 14. The new prices will take effect from June 15 and remain in force until July 14.

The upcoming review has attracted significant public attention amid growing concerns over the cost of living and transportation expenses across the country.

Recent remarks by Energy Cabinet Secretary Opiyo Wandayi have further fueled speculation that consumers may soon benefit from lower fuel prices.

The Cabinet Secretary recently indicated that EPRA was expected to implement a reduction of approximately KSh10 per litre on diesel prices, a move that could provide relief to transport operators, businesses, and consumers affected by high fuel costs.

Fuel prices in Kenya are determined by several factors, including global crude oil prices, exchange rate fluctuations, taxes and levies imposed on petroleum products, as well as shipping and importation costs.

As a result, changes in international oil markets often have a direct impact on local fuel prices.

In addition to lower global oil prices, CBK noted that the Kenyan shilling remained stable against the US dollar during the review period.

The currency traded at KSh129.52 per dollar on June 4, unchanged from the previous week.

A stable exchange rate is considered a key factor in moderating fuel prices because petroleum products are imported and paid for in US dollars. When the shilling remains strong or stable, oil marketers face lower foreign exchange risks, helping cushion consumers from sharp increases in pump prices.

However, despite the encouraging outlook on fuel costs, the Central Bank cautioned that inflationary pressures remain a concern.

According to the bank, Kenya’s overall inflation rate rose to 6.7 per cent in May 2026, up from 5.6 per cent recorded in April.

The increase was largely attributed to higher energy costs and transportation expenses that resulted from previously elevated global oil prices.

“Overall inflation increased to 6.7 per cent in May 2026 from 5.6 per cent in April 2026, mainly driven by higher energy prices and transportation costs arising from the elevated global oil prices,” CBK noted.

Economists say a reduction in fuel prices could help ease inflationary pressures in the coming months by lowering transportation and production costs across multiple sectors of the economy.

With EPRA’s review now just days away, businesses, transport operators, and consumers will be closely monitoring the regulator’s announcement, hoping that recent developments in global oil markets will translate into meaningful relief at the fuel pump and contribute to a reduction in the overall cost of living.

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CBK Signals Possible Drop in Fuel Prices as Global Oil Costs Fall Ahead of EPRA Review