Kenyan motorists could soon face higher fuel costs as global oil markets react sharply to rising tensions in the Middle East.
The spike follows Iran’s decision on March 1 to shut the Strait of Hormuz, a vital maritime corridor that facilitates roughly 20 per cent of the world’s oil and gas shipments. The move, triggered by escalating hostilities involving Iran, the United States and Israel, has disrupted international shipping and pushed crude prices toward the USD 100 per barrel mark.
For Kenya, the timing is critical. The surge comes barely two weeks before the Energy and Petroleum Regulatory Authority (EPRA) conducts its next monthly fuel price review. Any increase in global crude prices directly affects the landing cost of fuel imports — a key determinant in setting local pump prices.
Although Kenya has been importing fuel through a government-to-government arrangement with Saudi Arabian firms, the stability of that deal could be tested. While freight rates under the agreement are fixed, insurers may impose higher premiums due to the heightened risk in the Gulf region. Suppliers may also be forced to reroute shipments through longer, more expensive passages if the Strait remains inaccessible.
The Strait of Hormuz is widely regarded as the most efficient route for exporting oil from Gulf producers such as Saudi Arabia and the United Arab Emirates. Alternative routes typically involve extended voyages around Africa, significantly increasing transportation expenses. Those added logistics costs are often passed on to consumers.
In its current review covering February 15 to March 14, EPRA reduced pump prices, cutting Super Petrol by Ksh4.24, Diesel by Ksh3.93 and Kerosene by Ksh1.00. As a result, petrol is retailing at Ksh178.28 per litre, diesel at Ksh166.54 and kerosene at Ksh152.78.
However, with global supply chains under strain and crude prices climbing, the next pricing cycle could reverse those gains if the geopolitical standoff persists.
