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Even before Kenyans have had enough time to breathe in and heave a heavy sigh of relief, now news has broken out that will make the recent high fuel prices scare seem like child’s play. Just this week, the High Court, through Justice James Makau, suspended plans by the Kenya Revenue Authority to increase Excise Duty on Petroleum products which was supposed to take effect on 1st October. However, now the impending increments are those which the courts can’t save Kenyans from.
Goldman Sachs raised its forecast for year-end Brent crude oil prices to $90 per barrel from $80, as a faster fuel demand recovery from Delta variant and Hurricane Ida’s hit to production led to tight global supplies.
Brent futures hit a near three-year high last week as global output disruptions have forced energy companies to pull large amounts of crude out of inventories.
Presently, oil prices are ranging between 75 and 79 dollars per barrel. It’s expected that when the prices hit the projected high of 90 dollars, it will push the precious commodity out of reach for many Kenyans who are still struggling to make ends meet following the ravaging effects of the deadly Corona virus.
“While we have long held a bullish oil view, the current global supply-demand deficit is larger than we expected, with the recovery in global demand from the Delta impact even faster than our above-consensus forecast and with global supply remaining short of our below consensus forecasts,” Goldman said in a statement released this week.
Earlier this month, the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, agreed to stick to its decision made in July to phase out record output cuts.
Goldman, however, flagged a potential new virus variant, which could weigh on demand and an aggressively faster ramp-up in OPEC+ production that may soften its projected deficit, as key risks to its bullish outlook.
In case these two factors come into play, the forecasted high fuel prices may be avoided, of course, at the cost of a more deadly predicament; a surge of Covid infections.
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