Fuel price shocker: Diesel hits record Sh242 as pump prices jump in latest Epra review

Diesel will retail at a record-breaking Sh242.92 per litre for the next month, the highest pump price in Kenya’s history, which now leaves Kenyans bracing for a deepening cost-of-living crisis in the coming weeks and even months.

Super petrol has also significantly gone up and will retail at Sh214.25 in Nairobi.  

In its latest review, the Energy and Petroleum Regulatory Authority (Epra) increased pump prices by a staggering Sh46.29 per litre of diesel. Super petrol went up by Sh16.65 per litre. Kerosene, which is used by many low-income households across the country for cooking and lighting, will remain unchanged and retail at Sh152.78.

Epra removed the subsidy on super petrol but retained a Sh14.51 subsidy per litre of diesel. Kerosene remained heavily subsidised at Sh91.29 per litre. Over the next month, Epra said, the government would spend Sh5 billion in fuel subsidies.

The latest hike is expected to batter an economy that is already struggling with numerous shocks and can ill afford more hits. The ripple effects are expected to be immediate, pushing the price of essentials, including transport and food, beyond the reach of many Kenyans.

“In the period under review, the maximum allowed petroleum pump prices for super petrol and diesel increased by Sh16.65 per litre and Sh46.29 per litre respectively, while the price of kerosene remains unchanged,” said Epra in the statement. 

“The average landed cost of imported super petrol increased by 10 per cent… diesel increased by 20.32 per cent… while kerosene increased by 1.59 per cent.”

“The Government will, in this cycle, cushion the consumers through the Petroleum Development Levy (PDL) Fund by utilising approximately Sh5 billion to subsidise the prices of diesel and kerosene.”

The higher fuel prices are on account of the crisis in the Gulf region. The US-Israel attacks on Iran, which have persisted since February 28, and Iran’s retaliation, leading to the blockade of the Strait of Hormuz, where about 20 per cent of the world’s petroleum products pass through and resulted in a global energy crisis.

The Kenyan economy is heavily dependent on petroleum for transportation and production and the new prices are set to trigger a massive spike in transport costs and the price of basic essentials. The immediate impact is set to be felt by millions of commuters this morning as matatu fares go up, while private motorists feel the pinch at the pump that, in days will evolve into a full-scale financial strain. 

The impact is set to further be felt in key sectors such as agriculture and manufacturing, which combined contribute to a third of Kenya’s Gross Domestic Product and employ more than half of Kenyans.

In agriculture, the hike will inflate the cost of mechanised farming, irrigation and the distribution of produce from farm to market. Among manufacturers, who are already grappling with high production costs, expensive diesel threatens to increase the cost of all finished goods, further eroding the purchasing power of households.

Kenyans have been grappling with high costs for essentials, which have been inching upwards since the April pump price review. Inflation - which is the speed at which prices of commodities increase – increased to 5.6 per cent in April up from 4.4 per cent in March, pushed up by transport and food prices. 

There have been calls for the government to further reduce taxes beyond halving VAT to eight per cent, which was implemented in April, which was only effected after public outcry following the initial announcement by Epra that pushed the cost of diesel up by Sh40 per litre. 

The pump price for diesel for the May-June cycle has surpassed the Sh205.7 per litre of diesel that was experienced in October 2023. At the time, the increase was on account of different factors that included the doubling of VAT, reduced global supply and depreciation of the Kenyan shilling.

The record prices announced yesterday are despite the government attempting to cushion Kenyans. In the prices published yesterday, Epra said the government would spend Sh5 billion in fuel subsidies. In the April-May cycle, it spent Sh6.2 billion on subsidies as well as reduced Value Added Tax (VAT) to eight per cent, offering some reprieve but not adequate to tame the prices.

Combined, the Sh11.2 billion spent on subsidising fuel over the two cycles of April-May and May-June means it is almost at par with what the government spent over the financial year to June 2025.

During the year, the government spent Sh13.18 billion from the Petroleum Development Levy Fund kitty to subsidise fuel prices. The kitty collected Sh25 billion over the 2024/25 financial year, which was split between fuel stabilisation and petroleum development.

Retaining subsidies could mean that oil marketing companies continue haggling with the government over reimbursements of the money they forego at the pump but later refunded by the government under the subsidy programme 

The oil marketers have been grappling with arrears and are among the factors that have fuelled shortages in recent weeks as the companies stage a silent protest and withhold fuel from the pumps as they demand that the government clear the arrears.

Reports on Thursday indicated that the government had released Sh6 billion it owed oil marketers for the April-May cycle. 

Globally, countries have been taking different measures to cushion citizens from spikes in fuel prices.