Kenya's fuel prices have risen for a second consecutive month, with diesel setting a new all-time high and petrol climbing further above KSh 200, as the Middle East supply crisis continues to drive landed costs higher with no sign of relief.
- •The Energy and Petroleum Regulatory Authority (EPRA) announced maximum retail pump prices for the May 15 to June 14, 2026 cycle on May 14, with super petrol rising KSh 16.65 to KSh 214.25 per litre and diesel surging KSh 46.29 to KSh 242.92 in Nairobi.
- •The May price beats April's KSh 206.84 by KSh 36.08, a 17.4% jump in a single pricing window and the second record-breaking month in succession.
- •The increases are the second consecutive window to capture the full weight of Strait of Hormuz supply disruptions following the February 28 US-Israel strikes on Iran.
Kerosene remains unchanged at KSh 152.78. The new prices take effect at midnight.
Diesel landed costs rose 20.32% from US$1,073.82 per cubic metre in March to US$1,291.98 in April. Super petrol increased 10.00% from US$823.87 to US$906.23, while kerosene edged up 1.59% from US$1,311.93 to US$1,332.73.
The USD/KSh exchange rate eased marginally to 129.56 from 130.08, providing negligible relief against the scale of the dollar-denominated price shock.
Thinner Cushion
The government deployed KSh 5 billion from the Petroleum Development Levy Fund this cycle, down from KSh 6.2 billion in April, and narrowed the scope of support. Petrol receives no stabilization subsidy in the May cycle, a significant shift from April when KSh 4.68 per litre was absorbed on the product.
Diesel carries a stabilization deficit of KSh 14.51 per litre and kerosene KSh 91.29 per litre. The 8% VAT rate established by Legal Notice No. 70 on April 15 remains in force.
Without the kerosene subsidy, the product would retail at approximately KSh 244 per litre in Nairobi, nearly 60% above the current pump price. The narrowing of the subsidy envelope and the removal of petrol support signals that the Petroleum Development Levy Fund is under increasing strain as back-to-back shocks deplete its reserves.
Economy Already Feeling the Pain
The May review arrives as the economic damage from April's increases is still feeding through. Kenya's inflation climbed to 5.6% in April, the highest since March 2024, driven by food inflation of 8.8% and transport inflation of 10%.
The Stanbic Bank Kenya Purchasing Managers' Index showed private sector activity contracting for a second consecutive month as businesses absorbed rising operational costs.
The IMF has revised Kenya's 2026 growth forecast down to 4.4 to 4.5% from earlier projections of 4.9%, citing fuel import costs as a central risk, while projecting the budget deficit to widen to 6.4% of GDP.
The International Energy Agency warned this week that the Iran conflict could push global oil supply below demand throughout 2026. With the June pricing window set to capture cargoes discharged in May, and global oil markets still disrupted, the pressure on the next review has not eased.
