By Benadeta Mwaura - Reporter
Kenya , April 14, 2026 - Kenya’s next fuel pricing cycle is forming under growing pressure from global oil markets, with industry players warning that sustained volatility could soon feed into domestic pump prices.
The Petroleum Institute of East Africa (PIEA) has flagged rising international costs and supply uncertainties as key factors likely to influence the upcoming review by the Energy and Petroleum Regulatory Authority (EPRA).
The warning comes as global oil prices rise above $100 per barrel, driven largely by escalating geopolitical tensions in the Middle East.
For import-dependent economies like Kenya, such shifts translate directly into higher landed fuel costs, setting the stage for potential price adjustments in subsequent cycles.
At the centre of the concern is the increase in the cost of refined petroleum products in international markets.
Recent data shows that the landed cost of diesel rose by more than 8 percent between January and February 2026, while petrol and kerosene also recorded notable increases.
These costs are already embedded within the supply chain, even if they have not yet been fully reflected at the pump.
EPRA’s pricing model is based on previously imported cargoes, creating a lag between global price movements and domestic adjustments.
As a result, current pump prices do not fully reflect the extent of recent market volatility.
Despite rising global costs, EPRA has in recent months maintained relatively stable fuel prices, offering temporary relief to consumers and businesses.
In the March–April 2026 cycle, petrol in Nairobi remained at KSh178.28 per litre, diesel at KSh166.54, and kerosene at KSh152.78.
Regulators attributed this stability to the pricing formula, noting that the reviewed cargoes were sourced before the full escalation of global tensions.
This has effectively delayed the transmission of higher costs to consumers, creating what analysts describe as a “calm before the storm.”
However, this buffer is narrowing.
As newer, higher-cost shipments enter the pricing cycle, the likelihood of upward adjustments in pump prices is increasing.
Oil marketers argue that the current situation is unsustainable in the medium term.
With global prices rising and supply chains under strain, maintaining stable pump prices becomes increasingly difficult without either government intervention or cost absorption within the supply chain.
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The Petroleum Institute has warned that continued pressure on international markets, combined with currency fluctuations and logistical costs, could significantly influence the next pricing review.
This reflects a broader concern that Kenya’s fuel pricing system remains highly exposed to external shocks.
At the same time, exchange rate movements continue to play a critical role.
Since petroleum imports are denominated in US dollars, any weakening of the Kenyan shilling amplifies the impact of rising global prices on local fuel costs.
The stakes of the upcoming EPRA review extend beyond the energy sector.
Fuel prices remain a key driver of inflation in Kenya, affecting transport costs, food prices, and the overall cost of living.
Recent data from the Central Bank of Kenya shows that rising global oil prices are already feeding into inflation concerns, particularly as geopolitical tensions persist.
For businesses in transport, manufacturing, and agriculture, any increase in fuel prices is likely to raise operating costs.
These costs are often passed on to consumers, reinforcing inflationary pressure across the economy.
As EPRA prepares for its next review, the convergence of global market pressure, rising landed costs, and currency dynamics points toward a likely shift in domestic fuel prices.
While short-term stability has provided relief, underlying indicators suggest this may not hold.
The question is no longer whether global pressure will affect local prices, but how quickly and how sharply.
Ultimately, the situation reflects a familiar structural reality — Kenya’s dependence on imported fuel leaves it exposed to global market fluctuations.
As geopolitical tensions persist and oil markets remain volatile, the country’s pricing cycles will continue to be shaped by forces beyond its control.
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