NAIROBI, Kenya — The International Monetary Fund, the World Bank, and the International Energy Agency have united to tackle the global fuel crisis driven by the Middle East conflict, forming a joint coordination group to maximise their response to energy and economic impacts.
In a joint statement released on April 1, the heads of these global bodies announced the formation of the group to address the worsening global fuel crisis.
The crisis is driven by the ongoing war between Iran, the United States, and Israel, which has severely disrupted oil and gas supplies worldwide, pushing prices higher and squeezing economies across Africa, including Kenya’s.
“The Heads of the International Energy Agency, International Monetary Fund, and World Bank Group have agreed to form a coordination group to maximise their institutions’ response to the energy and economic impacts of the war in the Middle East,” the statement said.
Global Fuel Crisis Asymmetric Impact
The three bodies acknowledged that the global fuel crisis impact is substantial, global, and highly asymmetric, disproportionately affecting energy importers, particularly low-income countries. The burden is not shared equally, with vulnerable economies facing the hardest hit.
“The impact is substantial, global, and highly asymmetric, disproportionately affecting energy importers, in particular low-income countries,” the statement added.
The global fuel crisis extends beyond fuel to disrupt global supply chains for helium, phosphate, and aluminum.
Flight disruptions at major Gulf hubs are also hurting tourism, which many African economies, including Kenya, depend on.
The global fuel crisis coordination group has mapped out its approach to track energy prices, trade flows, inflation trends, and supply chain disruptions.
Global Fuel Crisis Support for Kenya
The group will provide policy advice, assess financing gaps, and offer financial support, including concessional loans designed for vulnerable economies like Kenya. They plan to rope in regional and multilateral partners to ensure support reaches affected countries efficiently.
“It is paramount that our institutions join forces to monitor developments and coordinate support to policymakers to navigate this crisis,” they said. Kenya is one of the hardest-hit countries from the global fuel crisis, with disrupted shipping causing tea export losses exceeding Sh3.1 billion.
The crisis raises the risk of higher inflation and fuel prices due to a weakened shilling and supply chain issues from the Gulf, creating significant anxiety over the cost of living.
President William Ruto assured Kenyans that the government is doing everything possible to cushion citizens from the ripple effects of the conflict.
