How the global oil crisis has increased Kenya’s fuel import costs

Energy Cabinet Secretary Opiyo Wandayi has warned of further upward pressure on fuel prices as escalating conflict in the Middle East disrupts global oil supplies, increases shipping costs and drives up the cost of petroleum imports.

Wandayi said the crisis had spread beyond shipping routes to critical oil infrastructure, including pipelines and loading facilities, forcing temporary shutdowns and the rerouting of cargoes.

In a statement, the Cabinet Secretary said attacks on tankers and oil facilities had tightened global fuel supplies, while rising freight and insurance costs had pushed prices higher.

He warned that the disruptions could exert further pressure on fuel prices in the coming weeks.

“The cost of importing Super Petrol through the Cost, Insurance and Freight (CIF) Mombasa arrangement rose from about Sh155,570 ($1,199) per tonne in August to Sh 179,703 ($1,385) in September,” the statement read in part.

Diesel import costs also increased from approximately Sh 155,700 ($1,200) to Sh 170,361 ($1,313) per tonne over the same period.

Wandayi said the increases continued a trend that began after landed fuel costs hit a low in June, with petrol reaching its highest level this year.

He explained that Kenya’s monthly M1 fuel pricing formula uses international benchmarks from the preceding month, meaning changes in import costs are reflected in subsequent pump-price reviews.

Despite the global disruptions, Wandayi assured Kenyans that the country’s fuel supply remained stable, with adequate stocks and cargoes arriving and being offloaded on schedule.

“Petroleum products remain available at fuel stations across all counties, with no interruption in supply,” he stated.

According to the Cabinet Secretary, international oil companies supplying Kenya under the Government-to-Government (G-to-G) arrangement have responded to disruptions at traditional Gulf loading ports by sourcing cargoes from alternative ports and regions.

Wandayi said the arrangement had helped shield Kenya from some of the rising costs affecting other markets.

He noted that while other countries faced higher freight charges and premiums amid the crisis, Kenya continued to benefit from fixed freight costs and premiums negotiated before the disruptions began.

The arrangement, he said, offered savings to consumers by cushioning the country against some of the volatility in international shipping and fuel markets.

Wandayi acknowledged that global oil prices remained beyond the direct control of the Kenyan government but said the administration would continue taking measures to cushion consumers against external shocks.

“The National Assembly is considering a Bill seeking to extend the application of the eight per cent value-added tax (VAT) on petroleum products by a further 90 days from October 15, 2026,” Opiyo added.