By Brian Kiprono - Reporter
Kenya, July 14, 2026 - The government has announced a Sh945 million fuel subsidy and extended the 8 per cent Value Added Tax (VAT) on petroleum products for another three months in a bid to shield motorists, households and businesses from rising global oil prices.
The intervention comes just hours before the Energy and Petroleum Regulatory Authority (EPRA) releases the latest fuel prices for the July-August pricing cycle, raising expectations that pump prices will remain largely stable despite renewed volatility in international energy markets.
Speaking on Tuesday, Energy and Petroleum Cabinet Secretary Opiyo Wandayi said the extension of the reduced VAT rate until October 14, 2026, was agreed in consultation with the National Treasury to cushion consumers from unpredictable global fuel prices.
"As part of the Government's commitment to cushioning households and businesses from international market volatility, in consultation with the National Treasury, we have extended the application period for 8 per cent Value Added Tax (VAT) on petroleum products for a further three months until 14th October 2026," Wandayi said.
He added that the government would also draw Sh945 million from the Petroleum Development Levy to help maintain current fuel prices during the July-August review period.
"Further, in the July-August 2026 pricing cycle, the Government will deploy a subsidy from the Petroleum Development Levy to the tune of Sh945 million to sustain the current price levels," he said.
The CS attributed the intervention to continued uncertainty in the international oil market, saying geopolitical tensions in the Middle East, particularly around the Strait of Hormuz, continue to influence global shipping and fuel prices.
"The market remains unsettled, and the Strait of Hormuz remains constrained, with commercial traffic running well below its usual levels and the daily Platts assessments moving sharply from one session to the next as events in the region continue to unfold," Wandayi said.
Despite the global uncertainty, he assured Kenyans that the country has sufficient fuel stocks and that supplies remain uninterrupted.
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"Fuel remains readily available across the country, supported by adequate national stocks, a resilient and fully operational import and distribution system, and the continued success of the Government-to-Government (G2G) fuel supply arrangement, which has strengthened Kenya's energy security while reducing pressure on foreign exchange demand," he said.
According to Wandayi, the G2G import framework has enabled Kenya to source fuel from a wider range of suppliers beyond the Gulf region, ensuring all scheduled cargoes arrive on time while helping stabilise landed fuel costs.
"I wish to assure motorists and all consumers that there is adequate fuel across the country and that the government remains steadfast in ensuring that this situation continues for the long haul," he said.
The announcement follows recent efforts by Kenya to strengthen its position as a regional fuel hub. Last month, Kenya and Rwanda signed agreements allowing Kigali to import bulk refined petroleum products through the Port of Mombasa under the Government-to-Government arrangement, a move expected to significantly increase fuel volumes transported through the Northern Corridor.
Currently, super petrol retails at Sh214.03 per litre in Nairobi, diesel at Sh202.86, and kerosene at Sh191.38.
EPRA is expected to announce the new fuel prices later today.