Kenya’s diesel import costs fell sharply in the latest pricing cycle, but the reduction initially failed to reach consumers at the pump.
The Energy and Petroleum Regulatory Authority (EPRA) has now reduced the maximum retail price of diesel by KSh5 per litre, while petrol and kerosene prices remain unchanged. The reduction means diesel in Nairobi will fall from KSh222.86 to KSh217.86 per litre from 15 August, while Super Petrol remains at KSh214.03 and kerosene at KSh191.38 per litre. The new prices will apply through 14 September 2026.
The outcome highlights the gap between the cost of imported refined fuel and the price consumers ultimately pay. EBC Financial Group had pointed to that gap ahead of the August review, arguing that the sharp fall in diesel import costs did not automatically translate into equivalent relief for diesel users. According to EBC Financial Group, the cost of importing diesel fell 23.9% to US$984.37 per cubic metre in the previous pricing cycle, from US$1,294.71. By comparison, petrol import costs fell by roughly 1% to US$886.92 per cubic metre.
The different movements in the cost of individual refined fuels are important because Kenya’s regulated pump prices are calculated using the actual costs of imported petroleum products rather than simply tracking the headline crude oil price. The divergence between import costs and retail prices had already attracted attention in Kenya. Business Daily reported that diesel’s landed cost fell 23.9% in the previous cycle while the potential relief was instead used to support petrol and kerosene prices. The previous Nairobi pump prices were KSh214.03 per litre for petrol, KSh222.86 for diesel and KSh191.38 for kerosene. They remained unchanged for the July 15-August 14 pricing cycle despite the lower landed cost of diesel.
Kenya imports refined petroleum products, meaning changes in the global crude oil market do not translate directly into identical changes in petrol, diesel and kerosene prices. EPRA’s pricing system takes into account factors including landed costs, taxes and other regulated components. The regulator publishes maximum retail prices for petroleum products each month, with each pricing cycle running from the 15th of one month to the 14th of the next. That means a fall in crude oil prices can provide relief, but the eventual effect at the pump depends on the cost of the refined products that actually arrive during the relevant pricing window.
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The Kenyan shilling also plays a role because petroleum imports are priced in US dollars. A relatively stable currency can reduce the impact of exchange-rate movements on the local cost of imported fuel. Diesel prices are particularly important for Kenya’s wider economy because diesel is widely used by freight operators, farmers, public transport providers, industrial businesses and power generators. Transport costs were already 15.6% higher than a year earlier, according to the EBC analysis, compared with overall inflation of 6.5%. This makes fuel costs an important factor for businesses moving goods and for consumers who ultimately absorb some of those transport costs.
Lower diesel prices can therefore have an impact beyond motorists. Cheaper fuel can reduce operating costs for trucking companies, agricultural machinery and other diesel-dependent businesses, although the effect on consumer prices depends on whether businesses pass those savings through to customers.
The relationship between import costs and pump prices is also affected by government intervention. Kenya has continued to use measures designed to cushion consumers from international fuel-price volatility, including tax relief and funding from the Petroleum Development Levy Fund. In the previous pricing cycle, KSh945 million was used from the fund to support fuel-price stability.
The difference between import costs and pump prices remains a persistent issue in an economy where transport costs affect everything from food to manufactured goods.
