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Kenyans should brace for higher fuel prices in May, with Treasury Cabinet Secretary John Mbadi warning that global oil market instability linked to the Middle East conflict will likely push costs up.
Appearing before the National Assembly’s Finance and National Planning Committee, Mbadi said the expected increase will mainly be driven by higher import costs in May and June, following disruptions in global energy supply chains, including the shutdown of the Strait of Hormuz—a key oil transit route.
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He noted that while the situation exposes Kenya to global shocks, there is no immediate cause for concern as the government has already put measures in place to manage the impact.
Mbadi explained that Kenya’s government-to-government oil supply arrangement with major Middle East firms such as Aramco Trading Fujairah, ADNOC Global Trading, and Emirates National Oil Company will help cushion consumers from extreme price spikes, as suppliers are obligated to ensure steady deliveries.
Despite the anticipated rise in fuel prices, he maintained that the economy remains stable, projecting growth of 5.3 percent in both 2026 and 2027, up from 5.0 percent in 2025.
He also revealed that an inter-ministerial team has been formed to closely monitor the situation and propose measures to protect the economy from external shocks.
According to Mbadi, Kenya currently has sufficient fuel reserves, with stocks of petrol, diesel, and jet fuel expected to last between 16 and 49 days, alongside additional shipments arriving in April.
However, he warned that a prolonged conflict could further disrupt supply chains, drive up shipping and insurance costs, and increase inflationary pressure.
The CS cautioned fuel marketers against hoarding in anticipation of price hikes, warning that the government will act against speculative behavior.
If instability persists, the government may consider tax adjustments, including shifting to an ad valorem tax system to ease the burden on consumers.
Lawmakers urged early intervention, referencing tax relief measures introduced during the Covid-19 pandemic to cushion citizens from rising costs.
Some MPs also called for long-term solutions, including investing in electric mobility to reduce reliance on imported fuel and exploring alternative oil import sources such as African producers and Turkana oil.
Mbadi further noted that the conflict is already impacting Kenya’s exports, particularly tea, due to disrupted trade routes. He added that the country is losing significant revenue from stalled exports of livestock and meat to Gulf markets like the UAE and Saudi Arabia.
However, he pointed out that the crisis has also created opportunities, with increased global shipping rerouting boosting activity at Lamu Port and raising daily revenues through higher transshipment volumes.
He concluded that while the situation presents risks, it also strengthens Kenya’s position as a key regional logistics hub.
