The Energy and Petroleum Regulatory Authority (EPRA) has announced a significant hike in fuel prices in its recent review, extending a blow that kicked-off last month. The new prices, which take effect on May 15 and will remain valid until June 14, 2026, are poised to have widespread ramifications on households, businesses, and the overall economy.
EPRA announced the maximum retail fuel prices on Thursday, in accordance with Section 101(y) of the Petroleum Act 2019 and Legal Notice No.192 of 2022, which establish the legal framework for petroleum price regulation in Kenya. The regulatory authority conducts monthly price reviews to ensure that fuel prices at the pump reflect the true cost of petroleum products already in the country, while also considering global price trends, taxes, and local distribution costs.
Super Petrol will see an increase of Sh.16.65 per liter, diesel will climb by a steep Sh. 46.29 per liter, and kerosene will remain unchanged. This marks one of the steepest price increases in recent years, adding to the growing financial burden on Kenyans already grappling with a high cost of living.
EPRA’s pricing methodology considers several core components including the landed cost (the price Kenya pays for refined products imported from international markets), distribution and marketing margins (costs associated with moving fuel from ports to retail stations), and the comprehensive array of taxes and levies imposed by the government.
Motorists in Nairobi will now pay a maximum of KSh214.25 for a litre of petrol and KSh242.92 for diesel, marking one of the steepest diesel price jumps in recent months. Kerosene will continue retailing at KSh152.78 per litre.
EPRA attributed the increase to global market dynamics. According to the regulator, the average landed cost of imported Super Petrol rose by 10 per cent between March and April 2026, increasing from US$823.87 to US$906.23 per cubic metre.
Diesel recorded the sharpest jump, rising by 20.32 per cent from US$1,073.82 to US$1,291.98 per cubic metre during the same period. Kerosene prices in the international market also increased by 1.59 per cent.
“In the period under review, the maximum allowed petroleum pump prices for Super Petrol and Diesel increases by KSh16.65/litre and KSh46.29/litre respectively while the price of Kerosene remain unchanged,” EPRA said in the statement.
Kenya continues to import all its petroleum products in refined form, exposing local pump prices to fluctuations in the international market and exchange rates.
The continued reliance on global markets for price stability highlights Kenya’s significant energy security vulnerability. Despite its potential to be an oil producer, with past discoveries in the Turkana basin, Kenya continues to import 100 per cent of its petroleum requirements in refined form.
This import dependency means that Kenya remains acutely vulnerable to geopolitical tensions, supply chain disruptions, and price shifts dictated by global oil market dynamics. The nation’s decision to rely entirely on refined imports stems from the closure and planned conversion of the Mombasa refinery, a strategic shift that made the supply chain more susceptible to currency fluctuation and global refining margins.
The price of crude oil, which is traded internationally in US dollars, has a direct impact on the cost of refined products landing in Mombasa. When the Kenyan shilling weakens against the dollar, the cost of procurement automatically increases, placing upward pressure on local pump prices, even if crude oil prices remain stable globally. EPRA’s formula must constantly manage this foreign exchange risk alongside crude price volatility.
Economic Implications
The ripple effects of the fuel price hike are expected to be far-reaching, impacting various sectors and exacerbating economic challenges for the average Kenyan.
Transportation Sector : The rise in fuel prices is anticipated to drive up the cost of public and private transportation. Matatu (public transport vans) operators have already indicated that they will pass on the additional costs to commuters, potentially increasing fares by up to 15%. For private vehicle owners, the financial strain will also intensify, leading to a possible decline in car usage.
Manufacturing and Logistics : Higher diesel prices will significantly increase the cost of transporting goods across the country, affecting supply chains and raising production costs. Manufacturers may pass these costs onto consumers, resulting in higher prices for essential goods, including food and household items.
Inflation and Economic Growth : Economists warn that the fuel price hike could trigger a rise in inflation rates. This will likely slow economic growth, with reduced consumer spending and increased operational costs across sectors.
Possible Mitigation Strategies
Investment in Renewable Energy : Experts advocate for accelerated investment in renewable energy sources such as solar, wind, and geothermal. Kenya, already a global leader in geothermal energy production, can further expand its renewable energy capacity to reduce reliance on imported oil.
Enhancing Local Refining Capacity : Rehabilitating and modernizing local refineries, such as the Kenya Petroleum Refineries Limited in Mombasa, could reduce the need for imported refined petroleum products, potentially lowering costs.
Strengthening Public Transport : Improving and expanding the public transport system could reduce reliance on private vehicles, decreasing overall fuel consumption. Initiatives such as electric buses and rail systems could also help lower long-term costs.
Looking Ahead
As the impact of the latest EPRA review unfolds, Kenyans are bracing for tougher economic conditions. The government faces mounting pressure to intervene and implement measures that can provide relief to struggling households and businesses.
In the long term, reducing dependence on imported oil and embracing sustainable energy solutions will be crucial in safeguarding the country’s economic stability. For now, however, the immediate focus must be on mitigating the short-term effects of rising fuel prices to avoid further economic strain.
The path forward will require careful navigation of multiple challenges including global market volatility, exchange rate management, domestic policy considerations, and the fundamental structural challenge of complete dependence on imported refined petroleum products. EPRA’s monthly review framework provides a mechanism for responsive price adjustments, though questions persist about whether the current approach achieves optimal balance between protecting investors and consumers.
