NAIROBI, Kenya, Jul 23 — Pump prices in Kenya have risen by Sh9 per litre for the July–August pricing cycle, sparking public outrage and questions from lawmakers.
Appearing before the National Assembly’s Departmental Committee on Energy, Energy and Petroleum Cabinet Secretary Opiyo Wandayi broke down the factors behind the increase.
Here’s what you need to know:
1. Rising Global Oil Prices (Sh5.3 per litre)
Wandayi said international oil prices jumped sharply between May and June:
- Super Petrol: +6.72%
- Diesel: +9.33%
- Kerosene: +8.15%
This added Sh5.17 per litre to petrol prices and pushed up the overall landed cost of fuel by Sh5.3 on average.
2. Higher Local Logistics and Storage Costs (Sh2.5 per litre)
Another sizeable chunk of the increase comes from logistics and distribution costs, which rose by Sh2.5 per litre.
This includes:
- Increased transport and storage margins
- Inflation-linked adjustments under the Cost of Service Study in Supply of Petroleum Products (COSSOP 2023)
- Higher pay for fuel haulers and increased secondary storage fees
Wandayi said the second phase of COSSOP, implemented on July 15, 2025, alone added Sh2.47 per litre (excluding VAT) to retail prices.
3. Forex Exchange Variations (10-cent dollar movement)
Changes in currency exchange rates contributed an additional variance in cost of fuel with the USD-Sh forex rate changing by 10 dollar cents.
What About the G-to-G Fuel Deal?
Some lawmakers questioned why the Government-to-Government (G-to-G) fuel import arrangement hasn’t shielded Kenyans from price hikes.
Wandayi clarified that the deal fixes freight and premium rates but does not protect consumers from global price movements.
How Much Are We Paying Now?
For the pricing cycle July 15–August 14, 2025, average retail prices in Nairobi are:
- Super Petrol: Sh186.31
- Diesel: Sh171.58
- Kerosene: Sh156.14
Where’s the Stabilization Money?
Lawmakers demanded accountability over the Sh25 billion Petroleum Development Levy allocated in this year’s budget for price stabilization.
They also sought clarity on the USD 10.9 billion (Sh1.41 trillion) in letters of credit already settled under the G-to-G arrangement.
Bottom line
Kenya’s latest fuel price hike is being driven by rising global oil costs, higher logistics and storage fees, and currency fluctuations — with questions lingering on the application of stabilization funds.
