With the discount, diesel goes down by Sh1 to sell at Sh107. 40 in Nairobi.
Prices for other towns have been adjusted accordingly.
The discounted prices are available to cash and SupaCard customers at all 85 National Oil service stations countrywide.
The price reduction comes just a week after the Energy Regulatory Commission (ERC) raised fuel prices by Sh2.63 to Sh121.13 cents for super petrol.
This latest reduced price offering is part of the ongoing strategic efforts by National Oil to become a market leader in petroleum products.
Super petrol shot up by a massive Sh7 in April, which the ERC pegged on rising global oil prices.
Recently, global oil prices have been dropping due to tensions over Iran’s nuclear program easing, since April’s meeting between Iran and the US, Britain, France, Russia, China and Germany.
However the upcoming talks over the Islamic Republic’s nuclear challenge in Baghdad later this month between the global powers, have already affected oil prices.
Benchmark oil for June delivery was up 43 cents to $91.90 a barrel in electronic trading on the New York Mercantile Exchange.