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Kenya: OPEC's Output Raise Fails to Stop Oil Price Surge
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Business Daily (Nairobi)
13 September 2007
Posted to the web 13 September 2007
Michael Omondi
Nairobi
Fuel consumers should not expect relief from the high fuel prices even as OPEC moved to calm the volatile global oil market by increasing output.
Oil held near a record high above $78 a barrel yesterday as an increase in crude output, by 500, 000 barrels per day, failed to calm worries about falling stocks and supply disruptions.
Analysts interviewed by Reuters noted that growing demand for oil, backed by supply fears in Mexico, could add as much as $10 a barrel to world oil prices.
Oil and gas pipelines in Mexico, the fifth largest oil exporter, came under attack on Tuesday from a rebel grouping, which is threatening more attacks on the installations.
"Global oil prices outlook is still not very encouraging, local pump prices will remain in the same range or move up slightly," Mr Andrew Omolo, the commercial manager of Triton Petroleum, told Business Daily.
He said current pump prices were based on crude prices purchased in April, when crude prices stood at US$73 per barrel, suggesting that the next load will come at a slightly higher price.
Spot check revealed that a litre of unleaded fuel is retailing at an average price of Sh81.79 within the Central Business District (CBD) in Nairobi, up from Sh75.99 in March.
Earlier, Central Bank of Kenya identified high fuel prices as the key driver of the inflation rate, which stands at 14.5 per cent having jumped from the single digit zone in the first quarter of the year.
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Players in the industry, however, have expressed dissatisfaction with the current oil importation system, arguing that it prevents oil marketers from hedging or purchasing crude oil in bulk when prices are low.
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