Kenya has increased fuel prices for the second consecutive month, sending diesel costs to an all-time high and adding to the financial strain on families and businesses already grappling with the rising cost of living.
The latest adjustment highlights the mounting effects of global oil supply challenges tied to escalating conflict in the Middle East, which has unsettled energy markets and pushed crude oil prices higher internationally.
In revised rates released on Thursday, the Energy and Petroleum Regulatory Authority announced that diesel prices had surged by 23.5 per cent to 242.92 Kenyan shillings ($1.88) per litre, up from 196.63 shillings.
Petrol prices also climbed from 206.97 shillings to 214.25 shillings per litre, while kerosene prices were maintained at 152.78 shillings.
The updated fuel rates are expected to remain effective until June 14.
The increase comes only weeks after a previous hike in pump prices, heightening fears over inflation in East Africa’s largest economy as citizens continue to face elevated food, transport and electricity expenses.
Kenya relies heavily on imported refined petroleum products through government-to-government agreements with Gulf-based oil suppliers, making the country particularly vulnerable to international energy market shocks.
Worldwide oil prices have risen sharply in recent months following renewed tensions around the Strait of Hormuz, a crucial maritime corridor responsible for transporting a large share of global crude exports, sparking concerns over possible supply shortages and shipping disruptions.
Brent crude prices exceeded $126 per barrel in April, marking their highest point in nearly four years.
Authorities stated that despite the latest price increases, diesel and kerosene continue to receive partial government subsidies. Diesel currently benefits from a subsidy of 15.67 shillings ($0.12) per litre, while kerosene receives support amounting to 98.60 shillings ($0.76) per litre.
Petrol subsidies have been removed as the government attempts to ease pressure on state finances. Outstanding subsidy obligations are estimated at around 17 billion shillings ($131.89 million).
The steep rise in diesel prices is expected to affect multiple sectors of the economy since the fuel is widely used in public transportation, freight movement, agriculture, manufacturing and backup power generation.
Economic analysts caution that companies may transfer the additional operating costs to consumers, potentially fueling another wave of inflation after Kenya’s inflation rate rose to 5.7 per cent last month.
Commuters are also likely to face increased transport fares, placing further pressure on urban residents already dealing with escalating living costs.
Ride-hailing workers, including drivers operating on Bolt in Kenya, have recently voiced concerns about soaring fuel expenses and declining incomes.
Kenya already imposes one of the heaviest fuel tax burdens in the region, with motorists paying several charges including VAT, excise duties, road maintenance fees and petroleum development levies.
The latest adjustment is expected to intensify calls for the government to introduce tax reductions or expand subsidy programmes.
Elsewhere across Africa, several governments have been forced to react to rising global fuel costs. South Africa recently halted fuel levies for one month, Namibia lowered fuel taxes for three months, while Zambia temporarily suspended excise duties and removed VAT on petrol and diesel products.
The latest energy price surge has revived fears about inflation in many African economies that rely heavily on imported petroleum and are simultaneously facing weaker currencies and slower consumer spending.
Economists warn that if fuel prices remain elevated in Kenya, household incomes could face greater pressure, business operating expenses may continue rising and economic growth could weaken in the months ahead.