Why fuel prices increased sharply; EPRA explains

Fuel prices have risen sharply due to a surge in international petroleum costs, with September recording the highest import costs since the Middle East crisis began, Energy and Petroleum Regulatory Authority (EPRA) Director General Edward Kinyua has said.

Kinyua said the average landing cost of super petrol rose by 11.81 per cent from $874.26 per cubic metre in August 2026 to $977.55 in September, while diesel costs increased by 11.2 per cent.

“September has been the worst month ever since this crisis broke,” Kinyua said while addressing the press.

He attributed the increase to rising international oil prices, which have pushed up the cost of importing refined petroleum products into Kenya.

Kinyua said the international price of super petrol had climbed to $1,300 per metric tonne, compared with about $600 per metric tonne when the Middle East crisis began, illustrating the increase in costs affecting fuel-importing countries.

“The government further reduced the value added tax of super petrol, diesel and kerosene from 16 per cent to 8 per cent to cushion consumers from the adverse effects of the spike in international prices,” he said.

The tax relief has been extended to January 14, 2027, in a move intended to limit the impact of higher international costs on consumers.

However, Kinyua said the increase in the cost of imported fuel continued to put pressure on local pump prices despite the government’s intervention.

He said EPRA also considered the price difference between kerosene and automotive fuels when setting pump prices, citing the risk that a large gap could encourage fuel adulteration.

The regulator must balance the need to keep kerosene affordable with measures to prevent its misuse through mixing with other petroleum products, which can undermine fuel quality and affect motorists.

Kinyua said the authority was also monitoring international market trends that could influence future prices.

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He noted that October marks the beginning of winter in Western markets, when demand for diesel and kerosene traditionally rises.

The seasonal increase in demand could add further pressure to international petroleum prices, complicating efforts to shield Kenyan consumers from volatility in the global market.

“Stabilisation of pump prices remains central to this administration,” Kinyua said, adding that the government was exploring alternatives to improve sustainability in the petroleum sector.

He cited major investment projects, including the recently launched Dangote East African Refinery project, as part of efforts to strengthen the sector and address the effects of price volatility.

Kenya relies heavily on imported refined petroleum products, leaving domestic fuel prices exposed to movements in international oil prices, shipping costs and other import-related expenses.

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