Fuel prices could go up further tomorrow when Energy and Petroleum Regulatory Authority (EPRA) announces new pump prices as continued sanctions by US on Iran cast uncertainty over the global market.
The US imposed economic sanctions on Persian Gulf Petrochemical Industries Company (PGPIC), Iran’s largest and most profitable petrochemical group, in a move that will see even less oil available in the global markets as reported by The Guardian.
Controlling 40 per cent of Iran’s petrochemical production and 50 per cent of the country’s petrochemical exports, PGPIC was sanctioned for having ties with Iran Revolutionary Guard.
This comes after other sanctions US issued against Iran in May which forced large importers such as Russia, China and Japan to look for oil elsewhere, leading to high demand and low supply of oil in the global market, resulting in increased oil prices.
Bloomberg reported that US is considering more sanctions against Iran that will reduce its oil exports even further in a bid to ensure zero exports, a move that is likely to increase demand for oil globally.
Fuel prices have been rising since March in response to the changes in the international market.
As of last month’s EPRA price reviews, super petrol prices rose by Sh11.94, diesel by Sh8.31 and kerosene by Sh7.63. The same trend is expected to continue.
During last month’s review, the cost of fuel inched up, an increase attributed to increased landed cost of imported oil.
An increase in the maximum fuel pump prices is likely to result in increased energy, transport, and manufacturing costs resulting in a rise in the average cost of living.
Most transportation occurs by road. The cost of consumer goods is also likely to hike as producers will pass the additional costs to them.