The Energy and Petroleum Regulatory Authority (EPRA) has announced the steepest single-month diesel price increase in Kenya’s history, raising the cost by KSh 46.29 per litre to an all-time record of KSh 242.92 in Nairobi. Super petrol increased by KSh 16.65 to KSh 214.25, while kerosene was held at KSh 152.78 through government subsidies. The new prices, effective from May 15 to June 14, 2026, reflect a 20.32% surge in diesel landing costs driven by the ongoing Iran war, supply disruptions around the Strait of Hormuz, and a weakened Kenya shilling against the US dollar. The government is deploying approximately KSh 5 billion from the Petroleum Development Levy Fund to cushion consumers on diesel and kerosene, though this is down from KSh 6.2 billion last cycle. With diesel now KSh 28.67 more expensive than petrol — an unprecedented gap — economists warn of cascading effects across transport, food, electricity, and manufacturing, threatening to push inflation even higher after it rose to 5.6% in April from 4.4% in March.
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Key Overview
- Diesel Price (Nairobi): KSh 242.92 per litre (+KSh 46.29) — all-time record
- Super Petrol (Nairobi): KSh 214.25 per litre (+KSh 16.65)
- Kerosene (Nairobi): KSh 152.78 per litre (unchanged, subsidised)
- Effective Period: May 15 to June 14, 2026
- Diesel Landing Cost Increase: 20.32% (US$1,073.82 to US$1,291.98 per cubic metre)
- Petrol Landing Cost Increase: 10% (US$823.27 to US$906.23 per cubic metre)
- Government Subsidy: Approximately KSh 5 billion from PDL Fund
- VAT Rate: 8% (reduced from 16% via Legal Notice No. 70, valid until July 14, 2026)
- April 2026 Inflation: 5.6% (up from 4.4% in March)
- Primary Drivers: Iran war, Strait of Hormuz disruptions, rising global crude prices, exchange rate pressure
In one of the most drastic fuel price adjustments in Kenyan history, the Energy and Petroleum Regulatory Authority has announced a KSh 46.29 per litre increase in diesel prices, pushing the cost to an all-time record of KSh 242.92 in Nairobi. Super petrol rose by KSh 16.65 to KSh 214.25, while kerosene was held unchanged at KSh 152.78 — though only because the government is actively absorbing what would otherwise be a punishing increase for low-income households.
The new prices, which took effect at midnight on May 15 and will remain in force until June 14, 2026, sent immediate shockwaves through the national economy. Diesel is now KSh 28.67 more expensive than petrol — an unprecedented gap in Kenya’s pricing history that represents a structural shock for the trucking, manufacturing, agriculture, and public transport sectors that run almost entirely on diesel.
A Record-Breaking Surge
The scale of the diesel increase is extraordinary even by the standards of recent months. The previous record for the largest single-month jump in any petroleum product was KSh 40.30 per litre, set for diesel just last month. This month’s increase surpasses that by nearly 15%. In April, the Kenyan Wall Street noted that the diesel hike was the largest single-month jump in at least 21 years of price records, surpassing the previous record of KSh 25.00 set in September 2022 by 61%. May’s figure rewrites that record again.
According to EPRA’s pricing data, the average landed cost of imported diesel surged by 20.32% between March and April 2026, jumping from US$1,073.82 to US$1,291.98 per cubic metre. Super petrol landing costs rose by 10%, from US$823.27 to US$906.23 per cubic metre. Kerosene landing costs increased more modestly by 1.59%, from US$1,311.93 to US$1,332.73 per cubic metre.
International petroleum prices during the review period averaged $1,060.01 per metric tonne for Super Petrol, $1,393.50 for diesel, and $1,542.55 for kerosene, according to EPRA. The Kenya shilling averaged approximately KSh 129.56 to the dollar in April, offering limited relief against the surging dollar-denominated import costs.
EPRA’s pricing window reflects cargoes that landed at Mombasa between April 9 and May 10 — a period capturing the worst of the current global energy crisis. By the time prices are reviewed again on June 14, consumers will be paying for fuel that arrived in May, which may carry even higher costs.
The Middle East Crisis at the Root
The root causes of this staggering adjustment extend far beyond Kenya’s borders. International crude oil markets have been heavily destabilised by the ongoing Iran war and the strategic disruption of shipping through the Strait of Hormuz, a chokepoint handling nearly a fifth of the world’s crude supply. The International Energy Agency has warned that the conflict could push global oil supply below demand throughout 2026, increasing the risk of further price spikes.
Kenya imports the entirety of its refined petroleum products, making local pump prices inextricably tied to fluctuations in global energy benchmarks and the dollar exchange rate. Global shipping insurance premiums have also surged, adding hidden logistical costs to every barrel imported into East Africa. EPRA has emphasised that international petroleum products are traded in US dollars and therefore directly affected by movements in global oil markets and foreign exchange rates.
The timing compounds what was already a punishing trajectory. In the previous April pricing cycle, EPRA had already increased petrol by KSh 28.69 and diesel by KSh 40.30 per litre. That means cumulative increases of KSh 45.34 for petrol and KSh 86.59 for diesel across just two consecutive monthly reviews — a pace of escalation that has no precedent in Kenya’s fuel pricing history.
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Government Cushioning: A Shrinking Buffer
Despite the steep increases, the government is attempting to soften the blow. EPRA confirmed that approximately KSh 5 billion from the Petroleum Development Levy Fund would be used to subsidise diesel and kerosene prices during this cycle. However, that figure is down from KSh 6.2 billion deployed in the previous cycle — the cushion is shrinking even as global prices are rising.
The Value Added Tax on petroleum products also remains at a reduced rate of 8%, down from the standard 16%, pursuant to Legal Notice No. 70 dated April 15, 2026, which is valid until July 14. This followed a chaotic series of VAT adjustments last month that saw the rate move from 16% to 13% and then to 8% within 48 hours. Without these interventions, the increases would have been considerably steeper. Oil marketers had projected that petrol could rise by up to KSh 37 per litre and diesel by as much as KSh 70 before stabilisation measures were applied.
The kerosene story is particularly revealing. The international wholesale price of kerosene has more than doubled in the past six months, but the government is absorbing the difference entirely to keep cooking and lighting fuel affordable for low-income households. That subsidy is not sustainable indefinitely.
The Cascade: Transport, Food, Electricity
Diesel is the indisputable lifeblood of the Kenyan economy. It powers the logistics trucks hauling agricultural produce from the Rift Valley to Nairobi’s markets, runs heavy machinery in manufacturing hubs, fuels the agricultural tractors essential for large-scale farming, and drives the matatu minibuses that form the backbone of Kenya’s public transport system.
The Federation of Public Transport Operators had already floated a 15% to 20% fare increase during last month’s cycle, and the mathematics only gets worse now. Matatu Owners Association President Albert Karakacha confirmed after last month’s hike that operators nationwide would adjust fares upwards to reflect rising operational costs. With diesel now at KSh 242.92, a fresh round of transport fare increases appears inevitable.
Food prices are typically the first to respond to fuel increases because Kenya’s agricultural supply chain relies heavily on diesel-powered road transport. Vegetables, fruits, dairy, maize, and bulk commodities move daily from rural production areas to cities by truck and van. Farmers also face higher irrigation, fertiliser, and farm input costs whenever fuel prices rise, creating a cascading effect.
Electricity bills face exposure too. Thermal plants running on diesel and heavy fuel oil contribute to the Fuel Energy Cost Charge (FECC) on every Kenya Power bill. April’s electricity FECC was already a record 347 cents per kWh, and analysts expect that line to climb further.
Kenya’s inflation had already climbed to 5.6% in April from 4.4% in March, according to data from the Kenya National Bureau of Statistics, driven largely by rising transport and food prices. Food and non-alcoholic beverages inflation reached 8.8% while transport inflation surged to 10%. A recent Stanbic Bank Kenya Purchasing Managers’ Index showed private-sector activity contracted for a second consecutive month in April as businesses struggled with fuel-related operational costs. The May prices are significantly higher than April’s — another inflation spike is now all but certain.
A Heavy Tax Burden
While global landing costs dictate the baseline price, the final figure Kenyan motorists pay at the pump is heavily padded by a complex web of state-imposed taxes and levies. Kenyans pay multiple taxes on fuel, including Excise Duty, Road Maintenance Levy, Petroleum Development Levy, Petroleum Regulatory Levy, Railway Development Levy, Anti-Adulteration Levy, Value Added Tax, Import Declaration Fee, and Merchant Shipping Levy. Consumer advocacy groups have argued the government must urgently revise this taxation framework to cushion the public during periods of extreme global volatility.
No Strategic Reserve, No Safety Net
Perhaps the most alarming structural vulnerability exposed by the crisis is that Kenya has no strategic petroleum reserve. The country relies entirely on the 21-day commercial stocks held by individual oil marketers. For comparison, Japan holds 260 days of supply, South Korea 210 days, and even India holds 25 days. Kenya holds zero strategic days.
Energy Cabinet Secretary Opiyo Wandayi told parliament in April that the government is in discussions to establish a reserve in Mombasa, possibly with private investors. But until domestic alternatives are meaningfully scaled or strategic reserves are built, every monthly pricing cycle carries the risk of another record.
The new prices took effect at midnight on May 15, 2026. Whether the next review on June 14 brings any relief depends entirely on the trajectory of the Middle East conflict, the price of Brent crude, and how much subsidy money the National Treasury is willing to keep deploying. For millions of Kenyan households and businesses, the economic dominoes are already falling.
Sources: EPRA / Kenyans.co.ke / The Star / Tech-ish / Techweez / Citizen Digital / Capital FM / Capital Business / Dawan Africa / TUKO / Kenyan Wall Street / Kenya National Bureau of Statistics / AllAfrica
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