Road freight costs in Kenya are set to rise by about 13% to 14% following a record jump in diesel prices, according to an industry advisory that signals an imminent increase in transport tariffs across the economy and beyond.
- •The Kenya Transporters Association told its members that the increase reflects the weight of fuel in operating expenses, which accounts for roughly 55% of total costs in road freight.
- •With diesel prices rising by about 24% in the latest pricing cycle by the Energy and Petroleum Regulatory Authority (EPRA), the association said the impact will feed directly into overall transport costs, forcing operators to revise rates.
- •The group advised immediate adjustments to pricing structures and urged engagement with customers to reflect the higher cost base, indicating that the pass-through will be swift.
The move sets the stage for a broad repricing of goods and services, as transport costs feed into nearly every segment of the economy, from food distribution to construction and manufacturing. Freight operators run on thin margins and have little room to absorb the increase, making a near-term rise in prices across the supply chain inevitable.
Kenya’s inflation rate ticked up to 4.4% in March from 4.3% in February, despite remaining below the 5% midpoint target. Core inflation held at 2.1%, while non-core pressures accelerated to 10.8%, driven by rising prices of tomatoes and Irish potatoes.
Meanwhile, Kenya relies greatly on imported food staples such as wheat, rice, and edible oils that are also facing a harsher global cost environment due to rising shipping and energy before even reaching the port of Mombasa. With higher freight costs, these products will be more expensive when they get to your local supermarket shelves.
In EPRA’s late night announcement, diesel rose by KSh 40.30 per litre to KSh 206.84 in Nairobi, the highest level on record, marking the largest single-month increase in more than two decades. The increase reflects a surge in global oil costs tied to supply disruptions in the Middle East and shipping constraints through the Strait of Hormuz, through which a significant share of global crude oil flows.
Government measures helped contain what would have been a significantly larger increase. Authorities reduced VAT on petroleum products from 16% to 13% and deployed billions of shillings from the Petroleum Development Levy Fund to cushion pump prices. Even with those interventions, diesel still recorded a historic increase, underscoring the severity of the external shock.
