Kenya Raises Fuel Prices as Middle East Disruptions Hit Supply

Kenya has raised the maximum retail prices of petrol and diesel and increased the cost of kerosene, adding pressure to motorists, households and businesses across the country.

Petrol prices increased by 6 percent, while diesel prices rose by 4.5 percent. The government also increased the price of kerosene, although the specific amount of that increase was not provided.

The changes were announced on Wednesday as escalating attacks on energy infrastructure in the Middle East affected fuel and oil production. Threats to shipping also disrupted deliveries worldwide, according to the source.

Global supply pressures

Kenya relies on the Middle East region for nearly all of its fuel supplies, leaving domestic prices exposed to developments affecting production and transportation in the region.

The energy regulator said the government had extended a reduced value-added tax rate on fuel. The rate will remain at 8 percent, down from 16 percent, until 14 January. The year attached to that deadline was not specified.

No new retail prices for petrol, diesel or kerosene were provided in the available information.

Expected impact on consumers

Kenya’s transport operator sector warned that the increase could have ripple effects on consumers. Higher pump prices are also expected to put renewed pressure on household spending and on businesses that depend on diesel-powered distribution and equipment.

Diesel is widely used in freight transport, agriculture, construction and backup power generation. Kerosene is used for cooking, lighting and some electricity generation, meaning changes in its price can affect household energy costs.

The latest increase follows public opposition to a similar fuel price rise. Kenyans and motorists took to the streets in May to protest against that earlier increase.

The extent of the effect on transport fares, household budgets and business operating costs was not specified.