New pump prices which will be announced today may see the fuel prices skyrocket even further, The continued sanctions by the US government on Iran has projected unpredictability over the global oil market.
The U.S sanctions imposed after Iran’s withdrawal from the 2015 nuclear deal have sent Iran’s oil sales crumbling down, including to Japan, which received its last cargoes of Iranian oil earlier this spring. The move by the US to impose sanctions on Iran means that there will be less oil available in the global market
The sanctioned company, Persian Gulf Petrochemical Industries Company was sanctioned because of its ties with the country’s Revolutionary Guards (IRGC). The US had issued other sanctioned before in May and many larger importers like China, Russia and even Japan had to look for oil elsewhere hence a high demand, low supply situation was witnessed in the global market which automatically meant that the oil prices would rise.
Fuel prices have been rising steadily since globally and as of May 2019, the price revisions in Kenya of petrol, diesel and kerosene rose by Sh5.43, Sh2.24 and Sh2.40 per litre respectively for Nairobi. The increase in pump prices was attributed to a weaker shilling and an increase in the landing cost of the oil products.
A rise in fuel pump prices will result in increased transport and manufacturing costs which means that the general cost of living will also rise. Consumer goods might also rise in cost since most of them are transported by road.