Kenya fuel prices surge amid global oil crisis and domestic controversy

A petrol pump attendant replaces a pump at a filling station in Soweto, South Africa, Tuesday, May 31, 2022. -

AP Photo

Last updated: 2 hours ago

Kenya

Kenya has announced a sharp rise in fuel prices, with diesel recording its biggest increase on record despite a recent tax cut.

The move comes as global oil markets react to rising tensions linked to the Iran conflict, pushing up both crude and shipping costs.

In its latest monthly review, the Energy and Petroleum Regulatory Authority raised diesel prices by 40 Kenyan shillings to 206 shillings ($1.6) per litre, while petrol increased by 28 shillings to a similar level.

The regulator said the hike reflects surging global costs, even after the government reduced value added tax on fuel from 16% to 13%. The new prices will remain in place until the next review on 14 May.

The increase has added pressure domestically, with reports of fuel shortages emerging in parts of the country. Authorities, however, insist supplies are adequate and have accused some fuel distributors of hoarding.

Public concern has also been fuelled by a separate controversy involving a disputed fuel shipment imported outside official government agreements at a higher cost.

Questions over the quality of that consignment, and claims it may have entered the market after being blended with existing reserves, have triggered widespread criticism.

The government says it had cancelled the shipment and barred its sale, but investigations are ongoing following the arrest and resignation of senior energy officials. EPRA has clarified that the disputed fuel was not factored into the latest pricing.

The price surge reflects a wider global energy shock linked to the conflict involving Iran, which has disrupted key supply routes, including the strategic Strait of Hormuz.

Although a temporary ceasefire has raised hopes of easing tensions, shipments through the corridor remain limited.

Across Africa, governments are introducing measures to cushion consumers, from tax cuts in Kenya and South Africa to energy rationing and sector prioritisation in countries such as Ethiopia and South Sudan.

Kenya fuel prices increase sharply due to Iran conflict and local issues

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