Pump prices will jump by a record Sh40 from midnight, driven by rising global fuel costs and a surge in shipping charges in the wake of the US-Israel war on Iran.
A litre of diesel will rise by the steepest margin of Sh40.30 to retail at Sh206.84 in Nairobi, effective midnight, while petrol will cost Sh206.97, reflecting an increase of Sh28.69.
A subsidy of Sh99.16 per litre of kerosene will keep its price unchanged at Sh152.78.
The increase, which comes despite subsidies of Sh20.30 and Sh4.92 per litre of diesel and petrol respectively, reflects the impact of the Middle East conflict, which has triggered an increase in product prices and shipping costs due to the blockade of the Strait of Hormuz.
“Effectively, the value added tax rate on super petrol, diesel and kerosene has been reduced from 16 percent to 13 percent in order to cushion consumers from the high landed cost of petroleum products as a result of the escalated prices in the international market,” said Joseph Oketch, acting Director-General of the Energy and Petroleum Regulatory Authority (Epra), in a notice issued late Tuesday night.
The average landed cost (price of product and shipping) for diesel rose by by 68.72 percent to $1,073.82 per cubic metre, while that for petrol and kerosene increased by 41.53 percent to $823.87 and 105.15 percent to $1,311.93 respectively in March 2026.
The sharp rise is expected to stoke inflationary pressures and raise the cost of living as manufacturers, service providers and electricity generators pass on higher fuel costs to consumers. Inflation edged up to 4.4 percent last month from 4.3 percent in February.
The jump in fuel prices comes at a time when Energy and Petroleum Cabinet Secretary Opiyo Wandayi had said a costly cargo of petrol imported outside the Government-to-Government (G-to-G) deal would be excluded from the pricing formula announced Tuesday night.
Mr Wandayi said the cargo, priced at Sh198,000 per metric tonne, would have triggered a price increase of about Sh14 per litre of petrol.
The new prices will remain in force until May 14 and come at a time when Kenya, like many other countries, has been hit by the Middle East conflict.
Iran has repeatedly attacked refineries in neighbouring countries in retaliation for strikes by the US and Israel. It has also blockaded the Strait of Hormuz, through which an estimated 25 percent of global fuel supplies pass.
The disruption of the route, alongside refinery attacks, has driven up global fuel prices, with Brent crude rising past $100 (Sh129,300) per barrel, while insurance and freight costs have also increased.
