Wandayi warns Kenyans: Fuel relief may take longer as Hormuz crisis rattles oil markets

Kenyans hoping for another significant drop in fuel prices may have to wait longer.

Energy and Petroleum Cabinet Secretary Opiyo Wandayi says the Government is watching an increasingly unpredictable global oil market, with renewed fighting between the United States and Iran threatening to keep crude prices under pressure.

Wandayi issued the warning on Wednesday, September 2, as Kenya approaches the next monthly fuel-price review.

“We shall continue to work with all the stakeholders, even as we contend with the fact that the situation at the global stage remains very fluid,” he said during an engagement with Tuk-Tuk operators in Nairobi.

His remarks come at a delicate point for motorists and businesses. The current Energy and Petroleum Regulatory Authority (EPRA) pricing cycle ends on September 14, with the next maximum pump prices expected to take effect on September 15.

The August review offered some relief, but not across the board.

EPRA cut the maximum price of diesel in Nairobi by KSh5 to KSh217.86 per litre for the August 15–September 14 cycle. Super Petrol remained at KSh214.03, while kerosene stayed at KSh191.38. The regulator said Government stabilisation support of KSh938 million helped keep petrol and kerosene prices unchanged.

The next review will now be made against a much more unsettled international backdrop.

Hormuz crisis puts fresh pressure on oil

Global oil markets have reacted sharply to the latest escalation in the Middle East.

Brent crude climbed 4.6 per cent on September 1 to settle at $94.65 a barrel, while US West Texas Intermediate rose 5.2 per cent to $90.22. The jump followed renewed US-Iran hostilities and mounting concerns over oil shipments through the Strait of Hormuz.

Prices remained volatile on Wednesday before easing slightly on Thursday. Brent was trading around $95 a barrel on September 3, with markets weighing both the risk of further escalation and signs that some oil shipments were still moving through the region.

The Strait of Hormuz is particularly important because of the volume of energy products that normally pass through it.

Recent shipping data showed a sharp fall in commercial traffic through the waterway, while Iran has expanded restrictions on vessels allowed to pass. Reuters reported that the strait accounted for nearly one-fifth of global oil shipments before the current conflict.

That uncertainty is now feeding into the outlook for countries such as Kenya, which relies heavily on imported petroleum products.

A sustained rise in international crude prices can eventually filter through to the cost of imported fuel. But the impact on Kenyan pump prices is not determined by crude prices alone.

EPRA's monthly formula also takes into account the landed cost of petroleum products, the exchange rate, taxes, levies and other charges.

That means a sudden movement in global crude prices does not automatically translate into an equal movement at Kenyan filling stations.

Government says it is cushioning consumers

Wandayi said the Government was taking steps to protect consumers and maintain adequate supplies despite the international uncertainty.

Among the measures is the continued reduction of VAT on petroleum products from 16 per cent to 8 per cent.

The reduced rate was extended in July and is scheduled to remain in force until October 14, 2026.

The Government has also used the Petroleum Development Levy to support fuel stabilisation.

In July, it announced an additional KSh945 million in stabilisation support as part of efforts to prevent global price pressures from being passed on fully to consumers.

Wandayi said these interventions had helped limit the effect of the international crisis.

“All these put together have significantly helped in mitigating the impact of this raging crisis in the Middle East,” he said.

The Government has also assured the public that fuel stocks remain adequate.

Wandayi said authorities had taken steps to maintain an uninterrupted supply of petroleum products despite the uncertainty in global markets.

That distinction is important.

Higher global oil prices do not currently mean Kenya is running out of fuel. The immediate concern is the price at which future shipments can be secured and how much of that cost will eventually reach consumers.

Why Tuk-Tuk operators are watching closely

For Tuk-Tuk operators, fuel prices are not an abstract international market story.

They affect daily operating costs and, ultimately, what passengers pay.

Wandayi's meeting with operators also touched on Kenya's longer-term move towards electric mobility.

The Government is targeting the expansion of electric vehicle charging infrastructure, with a stated goal of reaching 10,000 charging stations by 2030. Electric three-wheelers are increasingly being viewed as part of that transition because of their role in short-distance and last-mile transport.

But Wandayi acknowledged that the shift will take time.

“Even as we transition to e-mobility, we recognise that it is a journey,” he said, adding that petroleum products would remain important to Kenya's transport and energy needs in the meantime.

For millions of motorists, matatu operators, businesses and households, that means the price of petrol and diesel will remain an immediate concern even as the country plans for a less oil-dependent transport system.

What Kenyans should watch on September 14

The next EPRA announcement will provide a clearer picture of whether the latest international oil shock has translated into higher import costs for Kenya.

The August review showed why Government interventions can make a difference. Despite a rise in the landed cost of imported Super Petrol, the Government's stabilisation measures helped prevent an increase at the pump. EPRA reported that the average landed cost of imported Super Petrol rose by nearly 7 per cent between June and July.

But such interventions also come at a cost to public finances.

The Government has previously said it spent billions of shillings on fuel stabilisation and forgone significant tax revenue to cushion consumers during the crisis. President William Ruto said in June that more than KSh13 billion had been used in stabilisation measures over two pricing cycles, alongside billions in foregone VAT revenue.

That leaves the Government balancing two pressures: shielding consumers from a global energy shock while limiting the strain on public finances.

For now, Wandayi's message is one of caution rather than a promise of cheaper fuel.

The next price review will show just how much of the latest Middle East turmoil has reached Kenya's fuel market.

About the Author

Maureen Onyango is a journalist passionate about storytelling, life coaching and spiritual lessons. She studied at the Kenya Institute of Management and enjoys telling stories that inform, inspire and empower communities.