Crude Oil prices edged closer to the $100 per barrel mark Thursday driven by stark cutbacks imposed by Saudi Arabia and Russia, the main forces behind the Organization of the Petroleum Exporting Countries (OPEC+).
The cuts, allegedly implemented by the oil cartel in order to bolster oil prices, have been extremely successful, with barrel prices rising by a whopping 30% since June this year.
Crude price is likely to soar past the 100-dollar mark on the back of Russia and Saudi Arabia’s recent announcement that they intend to extend the current voluntary production cuts.
While high oil prices can spell pure profit for the oil sectors, it’s a fine line between stimulus and disincentive, as high prices at the pump can also cause significant dips in demand as the market reels from sticker shock.
It could near an all-time high of $110 between June and July last year due to the post-COVID-19 recovery.
“The run-up in oil prices is at the very tip top of my worries at this point,” Mark Zandi, chief economist at Moody’s Analytics, was quoted by Bloomberg. “Anything over $100 for any length of time, and we’re going to be very sick.”
In Kenya, the Energy Petroleum and Regulatory Authority (EPRA) reviewed the pump price to a record never seen before.
A litre of diesel jumped by Ksh21.32 to Ksh200.99 ($1.37) in Nairobi while that of super petrol rose by Ksh16.96 to Ksh211.64 ($1.4).
The country now has the 12th costliest fuel in Africa
A comparison of fuel prices across Africa shows that Kenya only trails the Central African Republic (CAR), Malawi, Zimbabwe, Sierra Leone, and seven other countries in terms of the most expensive fuel.