Why Kenyans won’t get fuel price relief as EPRA warns of tougher months ahead

The Energy and Petroleum Regulatory Authority (EPRA) has explained why it opted not to use the Petroleum Development Levy Fund to cushion consumers against the latest increases affecting fuel prices, with the regulator warning that international market conditions could put further pressure on prices in November and December.

EPRA Director General Edward Mwirigi Kinyua said the decision was informed by the need to strengthen the fund in anticipation of possible further increases in the cost of imported petroleum products.

The announcement came a day after EPRA raised the maximum retail price of Super Petrol by Sh12.93 per litre, diesel by Sh9.90 and kerosene by Sh28.49 for the period running from October 15 to November 14, 2026.

In Nairobi, Super Petrol now retails at a maximum of Sh226.96 per litre, diesel at Sh227.76 and kerosene at Sh219.87.

Kinyua did not disclose the current balance of the Petroleum Development Levy Fund but said the authority was working with the National Treasury on the funds available to support price stabilisation.

The Petroleum Development Levy Fund is one of the mechanisms the government has used to cushion consumers when the cost of importing petroleum products rises sharply.

Kinyua said the government had already spent Sh29.4 billion through the price stabilisation programme in the 2025/2026 financial year.

Of this amount, Sh24.3 billion was applied between April and June 2026, during the period when the current international fuel crisis intensified.

Kinyua said October marks the beginning of winter in Western countries, when demand for diesel and kerosene traditionally rises because the fuels are used for heating.

This seasonal demand is arriving when international petroleum prices are already elevated, raising concerns about the ability to maintain price stabilisation if import costs rise further.

According to the EPRA DG, the government was considering how to sustain stabilisation in the coming months and prepare for an uncertain international market.

EPRA's warning indicates that the government is preparing for the possibility that the cost of importing fuel could remain high or rise further into November and December.

The latest pump price increases followed a substantial rise in the average landed cost of imported petroleum products between August and September 2026.

According to Kinyua, the landed cost of Super Petrol increased by 11.81 per cent, from US$874.26 per cubic metre in August to US$977.55 in September.

Diesel's landed cost rose by 11.32 per cent, from US$957.05 to US$1,065.38 per cubic metre, while kerosene increased by 9.41 per cent, from US$1,003.87 to US$1,098.31 per cubic metre.

“September has been the worst month ever since this crisis broke,” Kinyua said.

He added that the international price of Super Petrol had risen to US$1,300 per metric tonne from an initial level of US$600 per metric tonne.

The increases in landed costs were reflected in the latest domestic price review, although the final pump prices also take account of taxes and other components in EPRA's pricing formula.

The government has maintained a reduction in Value Added Tax (VAT) on Super Petrol, diesel and kerosene from 16 per cent to 8 per cent, effective from April 15, 2026.

Kinyua said the measure had been extended to January 14, 2027, providing continued tax relief at the pump.

Despite concerns over international supply conditions, Kinyua said Kenya currently has more than 15 days of petroleum product stocks cover.

He also said the government met representatives of its suppliers under the government-to-government (G2G) petroleum sourcing arrangement during the previous week to discuss security of supply.

The suppliers involved are Saudi Aramco, the Abu Dhabi National Oil Company and the Emirates National Oil Company.

According to Kinyua, the suppliers assured the government that they were prepared to honour their contractual commitments to Kenya.

He said the G2G arrangement had become particularly important because international market conditions had created competing incentives for suppliers to sell petroleum products elsewhere.

Kinyua cited a diesel supply premium of US$78 per tonne under Kenya's arrangement, compared with more than US$250 per tonne in the international spot market.

He said the difference illustrated the commercial pressure facing suppliers, while the contractual relationship remained important in securing deliveries to Kenya.

The director general said the government would continue planning with its suppliers and could extend its planning horizon if the international situation worsened.

Kenya is currently planning around a 45-day horizon, but Kinyua said this could be extended to 60 or even 90 days if necessary.

Kerosene recorded the largest increase in the latest review, rising by Sh28.49 per litre, compared with Sh12.93 for Super Petrol and Sh9.90 for diesel.

Kinyua said the decision was partly intended to reduce the price gap between kerosene and motor fuels, which the regulator considers a potential incentive for fuel adulteration.

He said the authority had received complaints from the matatu industry about cases in which kerosene was allegedly mixed with diesel when the price difference made the practice attractive.

Rather than keep kerosene at what he described as an artificially low price, the regulator sought to bring its price closer to those of other fuels to reduce the incentive for adulteration.

EPRA also considered the potential consequences of a large price difference between kerosene and motor fuels when determining the maximum retail prices.