Kenya fuel prices rise sharply despite reduction in tax due to Iran war

Diesel prices rise by a record margin despite a reduction in value added tax. Kenya has sharply raised the cost of petroleum, with diesel prices rising by a record margin despite a fuel tax cut, as the conflict in Iran pushes up global oil prices.

In its latest review, the energy regulator raised the cost of diesel by 40 Kenya shillings to 206 ($1.6; £1.2) a litre, while petrol rose by 28 shillings to a similar level. It said this reflected higher global oil and shipping costs, even as the government cut value added tax to 13% from 16%.

The new prices will last until 14 May when the next review is due.

Fuel shortages have been reported in parts of the country, although the government insists stocks are sufficient and accuses some fuel companies of hoarding supplies.

The reports of shortages have been overshadowed by controversy over an allegedly substandard consignment imported last month outside government-to-government arrangements and at a significantly higher cost.

Reports that the fuel may have entered the market after being blended with stocks in government storage tanks have sparked public outrage and calls for accountability.

The government has previously said it cancelled the consignment amid concerns over its quality and cost and barred oil marketers from selling it. The matter, which led to the arrest and resignation of senior energy officials, is still under investigation.

On Wednesday, the Energy and Petroleum Regulatory Authority (Epra) said the disputed consignment had not been included in the computation of the new prices.

The price rises come amid the global fuel crisis caused by the US-Israel war with Iran that began on 28 February.

Concerns remain that the energy crisis may deepen despite a conditional two-week ceasefire signed last Wednesday that included opening the Strait of Hormuz, a key shipping route for global oil and gas supplies.

Shipments through the strait have largely been at a standstill since the war began.

Countries have taken various measures to cope with the crisis and cushion consumers from the price shocks, including cutting taxes and minimising wastage.

Kenya’s directive to cut VAT on fuel is scheduled to last until July. South Africa announced a one-month cut in the fuel levy two weeks ago to limit pump prices.

Other African countries to have announced similar measures include Zambia, Namibia and Ghana, while South Sudan announced electricity rationing and Ethiopia prioritised certain sectors to deal with the crisis.

Go to BBCAfrica.com for more news from the African continent.

— Diesel rises by KSh 40.30 per litre to KSh 206.84, nearly matching petrol, as global oil market disruptions driven by the U.S.-Iran conflict filter through to Kenyan pump prices — construction, transport and logistics sectors face immediate cost pressure.

Kenya’s construction, transport and logistics sectors woke up to significantly higher operating costs on Wednesday after the Energy and Petroleum Regulatory Authority (EPRA) announced the steepest fuel price increase the country has seen in years.

Effective from April 15 to May 14, 2026, diesel in Nairobi now retails at KSh 206.84 per litre — a jump of KSh 40.30, or 24.2 percent, from the previous cycle’s KSh 166.54.

Super petrol rose by KSh 28.69 per litre to KSh 206.97, while kerosene remained unchanged at KSh 152.78 — spared only by a massive government subsidy drawn from the Petroleum Development Levy Fund that absorbed KSh 108.10 per litre of the true market cost.

New Pump Prices: April 15 – May 14, 2026 (Nairobi)

Source: EPRA, April 14, 2026. Previous prices from the March–April 2026 cycle.

“The era of KSh 178 fuel is over. For trucking companies and contractors who run on diesel, this is not a gentle adjustment — it is a structural hit.”

The root cause traces directly to geopolitical disruption in the Middle East. Since U.S. and Israeli forces launched strikes on Iran on February 28, 2026, global oil markets have experienced a level of volatility not seen since the 1970s oil crisis.

The resulting supply uncertainty has sent crude and refined product prices sharply higher on international markets.

Because Kenya imports all of its refined petroleum products and these imports are priced in U.S. dollars, the country has limited insulation from global shocks.

EPRA’s pricing model also introduces a lag — it is based on previously imported cargoes, which means the March prices now feeding into April pump prices reflect cargoes sourced at the peak of post-strike market panic.

Average Landed Cost of Imported Fuel (per cubic metre)

Source: EPRA. February–March 2026 cargo data.

The numbers are stark. The landed cost of diesel surged 68.7 percent between February and March alone, while kerosene more than doubled at 105.2 percent.

The Kenya shilling’s continued weakness — averaging 130.08 per U.S. dollar in March — amplified the impact of rising dollar-denominated import costs.

The government deployed several cushioning tools ahead of the announcement. VAT on petroleum products was cut from 16 pe

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Kenya has sharply raised the cost of petroleum, with diesel prices rising by a record margin despite a fuel tax cut, as the conflict in Iran pushes up global oil prices.

In its latest review, the energy regulator raised the cost of diesel by 40 Kenya shillings to 206 ($1.6; £1.2) a litre, while petrol rose by 28 shillings to a similar level. It said this reflected higher global oil and shipping costs, even as the government cut value added tax to 13% from 16%.

The new prices will last until 14 May when the next review is due.

Fuel shortages have been reported in parts of the country, although the government insists stocks are sufficient and accuses some fuel companies of hoarding supplies.

The reports of shortages have been overshadowed by controversy over an allegedly substandard consignment imported last month outside government-to-government arrangements and at a significantly higher cost.

Reports that the fuel may have entered the market after being blended with stocks in government storage tanks have sparked public outrage and calls for accountability.

The government has previously said it cancelled the consignment amid concerns over its quality and cost and barred oil marketers from selling it. The matter, which led to the arrest and resignation of senior energy officials, is still under investigation.

On Wednesday, the Energy and Petroleum Regulatory Authority (Epra) said the disputed consignment had not been included in the computation of the new prices.

The price rises come amid the global fuel crisis caused by the US-Israel war with Iran that began on 28 February.

Concerns remain that the energy crisis may deepen despite a conditional two-week ceasefire signed last Wednesday that included opening the Strait of Hormuz, a key shipping route for global oil and gas supplies.

Shipments through the strait have largely been at a standstill since the war began.

Countries have taken various measures to cope with the crisis and cushion consumers from the price shocks, including cutting taxes and minimising wastage.

Kenya’s directive to cut VAT on fuel is scheduled to last until July. South Africa announced a one-month cut in the fuel levy two weeks ago to limit pump prices.

Other African countries to have announced similar measures include Zambia, Namibia and Ghana, while South Sudan announced electricity rationing and Ethiopia prioritised certain sectors to deal with the crisis.

Go to BBCAfrica.com for more news from the African continent.

— Diesel rises by KSh 40.30 per litre to KSh 206.84, nearly matching petrol, as global oil market disruptions driven by the U.S.-Iran conflict filter through to Kenyan pump prices — construction, transport and logistics sectors face immediate cost pressure.

Kenya’s construction, transport and logistics sectors woke up to significantly higher operating costs on Wednesday after the Energy and Petroleum Regulatory Authority (EPRA) announced the steepest fuel price increase the country has seen in years.

Effective from April 15 to May 14, 2026, diesel in Nairobi now retails at KSh 206.84 per litre — a jump of KSh 40.30, or 24.2 percent, from the previous cycle’s KSh 166.54.

Super petrol rose by KSh 28.69 per litre to KSh 206.97, while kerosene remained unchanged at KSh 152.78 — spared only by a massive government subsidy drawn from the Petroleum Development Levy Fund that absorbed KSh 108.10 per litre of the true market cost.

New Pump Prices: April 15 – May 14, 2026 (Nairobi)

Source: EPRA, April 14, 2026. Previous prices from the March–April 2026 cycle.

“The era of KSh 178 fuel is over. For trucking companies and contractors who run on diesel, this is not a gentle adjustment — it is a structural hit.”

The root cause traces directly to geopolitical disruption in the Middle East. Since U.S. and Israeli forces launched strikes on Iran on February 28, 2026, global oil markets have experienced a level of volatility not seen since the 1970s oil crisis.

The resulting supply uncertainty has sent crude and refined product prices sharply higher on international markets.

Because Kenya imports all of its refined petroleum products and these imports are priced in U.S. dollars, the country has limited insulation from global shocks.

EPRA’s pricing model also introduces a lag — it is based on previously imported cargoes, which means the March prices now feeding into April pump prices reflect cargoes sourced at the peak of post-strike market panic.

Average Landed Cost of Imported Fuel (per cubic metre)

Source: EPRA. February–March 2026 cargo data.

The numbers are stark. The landed cost of diesel surged 68.7 percent between February and March alone, while kerosene more than doubled at 105.2 percent.

The Kenya shilling’s continued weakness — averaging 130.08 per U.S. dollar in March — amplified the impact of rising dollar-denominated import costs.

The government deployed several cushioning tools ahead of the announcement. VAT on petroleum products was cut from 16 pe