CBK records rising global oil prices ahead of EPRA’s fuel price review
CBK records rising global oil prices ahead of EPRA’s fuel price review
Kenyans could face higher pump prices as the Central Bank of Kenya (CBK) reports a rise in international oil prices ahead of the Energy and Petroleum Regulatory Authority (EPRA) September–October review.
In its latest weekly bulletin, CBK said the surge is linked to geopolitical tensions in the Middle East and disruptions in global supply chains.
According to the bulletin, Murban crude closed at $69.39 per barrel (Sh8,966.91) on September 11, compared to $67.69 (Sh8,747.22) the previous week. CBK attributed the increase to potential supply disruptions caused by the Middle East conflict and the ongoing war in Ukraine, though concerns over weak U.S. demand and expected oversupply from planned OPEC+ output hikes kept gains in check.
“International oil prices rose, reflecting potential supply disruptions from the conflict in the Middle East and the war in Ukraine, even as concerns over weakening US demand and an expected oversupply from planned output increases by OPEC+ countries remain,” CBK noted.
The report added that a drone attack had temporarily halted shipments from western Russia’s largest port, further unsettling the market.
In the last cycle ending September 14, EPRA lowered petrol and kerosene prices by Sh1 per litre each while keeping diesel unchanged. In Nairobi, Super Petrol retailed at Sh185.31, Diesel at Sh171.58 and Kerosene at Sh155.58.
EPRA said the August prices reflected a 0.73 per cent drop in the average landed cost of petrol, which declined from $628.30 (Sh81,203) per cubic metre in June to $623.71 (Sh80,561) in July. Prices also factored in the 16 per cent VAT as provided in the Finance Act 2023, the Tax Laws (Amendment) Act 2024 and revised excise duty rates.
The regulator is expected to announce new pump prices for the September–October cycle on Sunday, September 14, 2025.
Despite oil price pressures, CBK said the Kenyan shilling held steady against major international and regional currencies, exchanging at Sh129.24 per US dollar on September 11, unchanged from the previous week.
“The Kenya shilling remained stable against major international and regional currencies during the week ending September 11, 2025. It exchanged at Sh129.24 per US dollar on September 11, unchanged from Sh129.24 on September 4,” read the bulletin.
The bank also highlighted that foreign exchange reserves remained adequate at $11.17 billion, equivalent to 4.9 months of import cover, above the statutory minimum of four months.
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“The usable foreign exchange reserves remained adequate at USD 11,170 million (4.9 months of import cover) as of September 11,” CBK said, noting that the buffer continued to shield the economy from external shocks.
Remittances remained a strong source of foreign currency despite a slight month-on-month dip. Inflows stood at $426.1 million (Sh55.07 billion) in August 2025, down from $427.2 million (Sh55.21 billion) a year earlier.
“The 12-month cumulative inflows to August 2025 increased by 9.4 per cent to USD 5,079 million compared to USD 4,645 million in a similar period in 2024. Remittance inflows remain a key source of foreign exchange earnings and continue to support the balance of payments,” the report added.
The bulletin also showed that the money market remained liquid, with commercial banks’ excess reserves at Sh20.6 billion above the 3.25 per cent cash reserve requirement. The overnight interbank rate (KESONIA) eased to 9.45 per cent from 9.48 per cent the previous week, with banks trading an average of Sh11.4 billion daily.
In government securities, demand stayed high. The Treasury bill auction of September 11 attracted Sh38.8 billion in bids against Sh24 billion on offer, representing a 161.5 per cent subscription rate. Interest rates on the 91-day, 182-day and 364-day bills all declined. CBK accepted Sh28.91 billion, comprising Sh15 billion in competitive bids and Sh13.87 billion in non-competitive bids.
At the Nairobi Securities Exchange, the NASI, NSE 25 and NSE 20 indices gained 0.4 per cent, 2.0 per cent and 1.9 per cent, respectively, even as equity turnover dropped by 30.8 per cent. Bond turnover also fell by 21.0 per cent, while Kenya’s Eurobond yields eased by 60.6 basis points.
Oil markets remained volatile, with CBK warning that geopolitical risks could keep prices elevated in the coming weeks.
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