kariuki392/DataAnalysisProject24-Global-Crude-Volatility-Local-Macro-Mitigation-Engine

EPRA Fuel Pricing & Subsidy Optimization Model. Quantitative Energy Finance & Regulatory Policy Analysis, USA-Iran Geopolitical Tension. This project implements a quantitative energy finance and fiscal policy model tracking the transmission of global crude oil volatility to Kenya's local pump prices and government subsidy sustainability. # 🛢️ Global Crude Volatility & Local Macro-Mitigation Engine ## EPRA Fuel Pricing & Subsidy Optimization Model | 90-Day Crisis Scenario **Quantitative Energy Finance & Regulatory Policy Analysis** | July–September 2026 | USA-Iran Geopolitical Tension --- ## 📋 EXECUTIVE OVERVIEW This project implements a **quantitative energy finance and fiscal policy model** tracking the transmission of global crude oil volatility to Kenya's local pump prices and government subsidy sustainability. It combines: - **Global crude price modeling** (Brent indices with 3 embedded geopolitical shocks) - **Currency transmission mechanics** (USD/KES exchange rate correlated with oil moves) - **EPRA pricing formula engine** (synthetic pump price generation under 3 VAT scenarios) - **Fiscal subsidy runway analysis** (KSh 945M PDL fund depletion trajectory) - **Transport sector strike risk modeling** (Nairobi matatu fare elasticity across 3 routes) - **Consumer purchasing power erosion** (inflation spillover from fuel → food prices) **90-Day Simulation Period (July 14 – October 13, 2026):** - Brent crude range: $82–115/barrel - USD/KES depreciation: 130–145 KES/USD - Subsidy survival status: Runway through Day 90 (critical by mid-August) - Matatu strike risk: High volatility in Days 40–60 and 75–90 - Consumer cost impact: Transport budget increases 8–12% in worst-case scenarios --- ## 🔬 SECTION 1: GLOBAL CRUDE MARKET DYNAMICS ### 1.1 Brent Crude Price Path The model generates a **90-day Brent crude trajectory** with 3 discrete geopolitical shocks embedded to reflect real-world crisis scenarios: **Base Parameters:** - Starting price: $88/barrel (historical average July 2026) - Daily volatility: 2% (log-normal random walk) - Realistic range: $82–115/barrel **Embedded Geopolitical Shocks:** | Day | Event | Impact | Rationale | |-----|-------|--------|-----------| | **15** | USA-Iran Tension Escalation | +$12/barrel | Regional conflict triggers Hormuz concerns | | **50** | Hormuz Shipp …