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The Energy and Petroleum Regulatory Authority (EPRA) has defended the latest increase in fuel prices, citing rising international import costs, tightening global diesel supplies and the need to discourage petroleum adulteration.
The regulator has raised the prices of Super Petrol, diesel and kerosene for the October-November pricing cycle, adding pressure on households and businesses already grappling with the cost of living.
EPRA Director-General Eng. Edward Mwirigi Kinyua said the government was monitoring developments in the international petroleum market and taking measures to safeguard the country’s fuel supply amid geopolitical tensions and disruptions affecting international trade.
The new prices take effect on October 15 and remain in force until November 14, 2026.
Under the revised schedule, a litre of Super Petrol in Nairobi will retail at a maximum of KSh 226.96, up by KSh 12.93, while diesel will cost KSh 227.76, an increase of KSh 9.90.
Kerosene has recorded the steepest increase, rising by KSh 28.49 to KSh 219.87 per litre.
The new rates represent a significant increase from the previous pricing cycle, when Super Petrol retailed at KSh 214.03, diesel at KSh 217.86 and kerosene at KSh 191.38 per litre in Nairobi.
International market pressures
Speaking during a press briefing in Nairobi on Wednesday, Kinyua said the international petroleum market remained volatile, with supply disruptions and restrictions affecting the availability of products in some markets.
He cited tightening global diesel supplies and efforts by some countries to release strategic stocks as indications of the pressure facing the international market.
Kinyua cautioned that the future direction of petroleum prices remained uncertain, saying the government needed to prepare for possible supply disruptions rather than assume that current market conditions would persist.
He did not announce an imminent national fuel shortage but emphasised the importance of proactive planning to maintain reliable supplies.
The latest price increases reflect the higher costs of importing petroleum products. EPRA’s review indicated that the average landed cost of imported Super Petrol rose by 11.81 per cent, from US$874.26 to US$977.55 per cubic metre, between August and September 2026.
The landed cost of diesel increased by 11.32 per cent, from US$957.05 to US$1,065.38 per cubic metre, while kerosene rose by 9.41 per cent, from US$1,003.87 to US$1,098.31 per cubic metre.
The increases illustrate Kenya’s exposure to fluctuations in international fuel prices because the country relies on imported refined petroleum products.
G2G contracts cushion supply risks
Kinyua said the government’s government-to-government (G2G) petroleum supply arrangements had helped Kenya secure supplies through long-term contracts rather than relying entirely on the international spot market.
He explained that contracted suppliers could source products from alternative markets when conventional supply routes were disrupted, helping maintain deliveries to Kenya.
According to Kinyua, the arrangements had become particularly valuable amid the current uncertainty, when buyers operating in the spot market could face higher premiums and delays in obtaining products.
He said the government had entered the arrangement initially to address challenges associated with accessing foreign currency, but it had also proved useful in securing supplies during international market disruptions.
Kinyua added that the existing contracts would remain in place until their expiry, after which Kenya could consider further diversification of its petroleum supply sources.
However, the supply arrangements have not insulated consumers from international price movements, as demonstrated by the latest increases at the pump.
EPRA explains kerosene increase
The director-general also defended the sharp increase in kerosene prices, saying the authority wanted to narrow the price difference between kerosene and other petroleum products to discourage fuel adulteration.
He explained that a substantial price gap could create an incentive for unscrupulous traders to mix cheaper kerosene with diesel or petrol for illegal resale.
Kinyua said a difference of approximately KSh 30 per litre could generate substantial illicit profits when applied to a tanker carrying 30,000 litres.
He added that EPRA operated fuel-marking and monitoring programmes but remained aware that offenders continued to devise ways of evading enforcement systems.
According to him, aligning kerosene prices more closely with the actual cost of the product, alongside measures such as the anti-adulteration levy, was intended to reduce the financial incentive for the practice.
The increase, however, has direct implications for households that depend on kerosene for cooking and lighting.
While the regulator maintains that the adjustment is necessary to discourage illegal trading practices, consumers will now have to contend with higher costs for a product used by some of the country’s lower-income households.
The extent to which the price adjustment will reduce adulteration will depend on enforcement, monitoring and compliance across the petroleum supply chain.
Dangote refinery offers long-term prospects
Kinyua said the planned Dangote refinery investment in Kenya would strengthen the country’s petroleum supply security by bringing production and storage facilities closer to the domestic market.
He argued that having petroleum products stored locally would reduce dependence on cargoes travelling long distances from international suppliers and routes vulnerable to geopolitical disruptions.
The director-general said the investment would be beneficial regardless of whether Kenya purchased products through spot transactions or long-term agreements, provided supplies were available locally.
However, he did not disclose a specific agreement on the volume of fuel the refinery would supply to Kenya or the proportion of domestic demand it would meet.
The proposed refinery remains a longer-term prospect and will not provide immediate relief from the latest pump-price increases.
Lokichar oil production targeted for December
In another development, Kinyua said the government remained committed to commencing crude oil production from the Lokichar basin on December 1, 2026.
He said a drilling rig had arrived and preparations were under way to begin drilling the first well by mid-November, with the drilling programme expected to take approximately 14 days.
Kinyua added that existing wells in the Gamia and Amosing fields could be restored through rehabilitation and completion works, allowing production to begin in stages.
He projected that the first crude oil exports would take place in the first quarter of 2027.
The planned production would mark progress in Kenya’s efforts to develop its domestic petroleum resources. However, producing crude oil locally will not automatically translate into lower pump prices because the country will still need to account for refining, transportation, export arrangements and the cost of importing refined products.
Kinyua said Kenya’s crude oil, which he described as low in sulphur but waxy, would be sold through willing-buyer, willing-seller arrangements, with the government seeking competitive prices in the international market.
The production and export timelines remain projections given by the director-general during the briefing.
Licensing of new oil blocks pending
Kinyua also said preparations were under way for a new petroleum exploration licensing round, subject to the completion and gazettement of outstanding regulations.
He said Kenya had delineated 50 petroleum blocks across the Lamu, Mandera, Anza and Tertiary Rift basins.
The proposed licensing round would initially include eight blocks in the Lamu Basin and two in the Anza Basin.
According to Kinyua, the government needed to finalise the regulatory framework before inviting investors to participate in the licensing process.
On questions concerning the maritime area disputed between Kenya and Somalia, he said the blocks proposed for licensing were outside the disputed region and referred further questions on the boundary to the relevant government office.
Fuel standards remain under review
Kinyua further disclosed that deliberations were continuing on fuel specifications following a notice issued in April, which was due to expire at the end of October.
He said the government was assessing how strict product specifications could affect the country’s ability to obtain supplies during international disruptions.
The director-general did not announce a formal extension of the notice or a final change to the fuel specifications, indicating that discussions were still under way.
The issue presents a challenge for regulators seeking to maintain fuel-quality standards while ensuring reliable supplies in a volatile international market.
Any changes to fuel specifications would need to be clearly communicated to consumers and industry players, with appropriate safeguards to protect product quality and public health.
Consumers bear the immediate cost
The latest review places the immediate burden of higher petroleum costs on motorists, households and businesses.
Higher diesel prices could increase operating costs for freight transport, public service vehicles and agricultural machinery, potentially contributing to higher prices for goods and services.
The petrol increase will affect motorists, while the steep rise in kerosene prices could place additional pressure on households that rely on the fuel for basic energy needs.
Although the government is pursuing longer-term measures through domestic oil production, proposed refinery investment and petroleum supply arrangements, their eventual impact on consumer prices will depend on several factors, including international crude prices, refining costs, taxation, transport expenses and domestic supply conditions.
For now, the challenge facing EPRA and the government is to maintain reliable fuel supplies while addressing the affordability concerns arising from the latest increases.
Courtesy: KNA