Why lower global pressure has not yet reduced pump prices

Even as the government insists that Kenya’s fuel supply remains stable, many motorists and households are still struggling with high pump prices that continue to push up the cost of living.

In a press briefing on the state of petroleum supply, Energy Cabinet Secretary Opiyo Wandayi sought to reassure Kenyans that there is no shortage of fuel in the country despite ongoing global market disruptions.

However, the statement also highlighted the difficult reality facing consumers, with international oil prices continuing to influence local fuel costs.

According to Wandayi, fuel prices in Kenya are largely influenced by international market conditions beyond the government’s direct control.

“Fuel prices are determined by global market forces beyond the control of any single country,” Wandayi said.

The CS explained that while Kenya has managed to maintain a steady supply of petroleum products, the country still depends heavily on imported fuel, making it vulnerable to fluctuations in the global oil market.

International benchmark prices, which are used to determine the cost of crude oil and refined products worldwide, continue to shift due to geopolitical tensions, supply chain disruptions and changing demand patterns.

These fluctuations eventually affect the landed cost of fuel in Kenya and are reflected in pump prices reviewed monthly by the Energy and Petroleum Regulatory Authority.

Wandayi strongly defended the government-to-government fuel importation framework, commonly known as the G2G model, saying it has helped Kenya avoid the fuel shortages witnessed in some countries within the region.

“At a time when global energy markets remain uncertain, Kenya’s fuel supply remains secure, stable and very well managed,” he said.

The CS argued that the arrangement has helped stabilise key costs linked to fuel imports, especially freight and premium charges, which form part of the overall landed cost.

“As a matter of fact, our freight and premium under the G2G framework is US$78 per tonne for diesel, US$84 per tonne for petrol and US$97 per tonne for Jet A1 fuel,” Wandayi stated.

He contrasted this with countries relying on open market purchases, where freight and premium costs reportedly rose to between US$250 and US$300 per tonne during periods of market instability.

Despite the government’s defence of the G2G framework, many Kenyans continue to question why pump prices remain high even when officials insist the system is working.

While the government says the framework protects consumers from sharper price spikes, motorists are still spending heavily on transport and fuel-related costs, with businesses also passing higher operating expenses to consumers.

Wandayi acknowledged that global uncertainty continues to affect pricing, although he noted there are signs of gradual improvement in international markets.

“Changes in demand patterns and improved supply routing are gradually stabilising international markets,” he said.

He added that Kenyans could eventually begin to feel relief if global conditions continue improving.

The CS also revealed that Kenya currently has enough petroleum stocks, with vessels waiting offshore to discharge more fuel.

“In a nutshell, the country continues to enjoy security of supply of petroleum products,” Wandayi said.

He urged oil marketing companies to quickly collect fuel already available in the system to create room for more imports.