Kenya’s energy regulator raised retail fuel prices by as much as 24.2% on Tuesday, citing a spike in global crude costs and supply disruptions linked to the conflict in the Middle East.
The Energy and Petroleum Regulatory Authority (EPRA) said the price of diesel will increase by 40.30 shillings ($0.31) per litre, while super petrol will rise by 28.69 shillings. In the capital Nairobi, petrol will now retail at 206.97 shillings per litre and diesel at 206.84 shillings, effective through May 14.
International oil markets have faced extreme volatility since hostilities in the Middle East escalated on Feb. 28, choking supply through the Strait of Hormuz. EPRA data showed the average landed cost of imported diesel surged 68.7% over the last month, while petrol rose 41.5%.
To cushion the impact on consumers, the Kenyan government reduced the value-added tax (VAT) on petroleum products to 13% from 16% and deployed 6.2 billion shillings from a state stabilization fund. Without these interventions, prices would have likely exceeded 220 shillings per litre, according to the regulator.
The price of kerosene remained unchanged at 152.78 shillings per litre, despite a doubling of its landed import cost, as the government prioritized subsidies for the fuel used widely by low-income households for cooking and lighting.
The sharp hike in diesel, the primary fuel for transport and manufacturing, is expected to drive up inflation in East Africa’s largest economy. Transport unions have already warned of imminent fare increases.
The adjustment comes as the government also manages a domestic investigation into a disputed fuel consignment that led to the exit of several high-ranking energy officials last month. EPRA clarified that the cargo in question was not included in the current price calculations.
