Kenya Raises Petrol 6% and Diesel 4.5% as Middle East Conflict Lifts Import Costs

Kenya raised the maximum retail price of petrol by 6% and diesel by 4.5% for the cycle running from 15 October to 14 November, the Energy and Petroleum Regulatory Authority said, citing a sharp increase in the landed cost of imported fuel linked to the conflict in the Middle East.

In Nairobi, a litre of super petrol now costs KSh226.96, up KSh12.93, while diesel rises KSh9.90 to KSh227.76. Kerosene, used widely for cooking and lighting, jumped KSh28.49 to KSh219.87. The increases were announced on 14 October and took effect the following day.

The cost drivers

EPRA said the average landed cost of imported super petrol rose 11.81% between August and September, from $874.26 to $977.55 per cubic metre, while diesel rose 11.2% and kerosene 9.41%. Kenya imports all of its refined petroleum products, so global benchmark prices and the shilling-dollar exchange rate feed directly into local pump prices.

EPRA Director-General Edward Kinyua said September recorded the highest fuel import costs since the Middle East crisis began. The conflict has disrupted flows around the Strait of Hormuz, a chokepoint for a large share of the crude and refined products that reach East Africa.

Tax relief, but not enough to offset the rise

The government extended a reduction in value-added tax on petroleum products from the standard 16% to 8% until mid-January 2027, the third such extension since April. Parliament also passed the Tax Laws (Amendment) Bill, 2026, which would keep VAT on fuel at 8% for a further 90 days, with a possible extension.

The relief softened the pass-through but did not prevent the increase. Taxes and levies account for a substantial share of the pump price, a point industry players have raised as they question the domestic tax burden on fuel.

What it means for households and business

Higher pump prices ripple through the economy. Matatu operators have warned of fare increases, which would add to household transport costs. Kerosene users, often lower-income households, face the steepest percentage increase of the three products.

For businesses, diesel is a direct input into logistics, manufacturing and power generation, so the increase raises operating costs and could feed into consumer prices in the coming months. That complicates the inflation picture the central bank is watching as it weighs its next interest-rate move. The Central Bank of Kenya has held its benchmark rate at 8.75% for four consecutive meetings.

The outlook

The next price review is due on 14 November, and its outcome depends heavily on where global crude and refined-product benchmarks settle and on the shilling. A durable easing in Middle East supply risk would relieve the pressure; a further escalation in the Strait of Hormuz would tighten it again. Kenya's broader growth picture remains strong, with second-quarter GDP up 5.1%, but the fuel shock is a reminder of how exposed the economy is to imported energy costs.