The Energy and Petroleum Regulatory Authority (EPRA) has announced a Sh5 reduction in diesel prices following a recent fuel pricing cycle, marking a modest yet significant adjustment aimed at easing financial pressures on motorists and industries. The change comes after a delicate balancing act by the government to manage inflation while ensuring stability in energy markets. Diesel prices in Nairobi will now stand at Sh217.86 per litre, reflecting a decrease from previous levels. In contrast, super petrol and kerosene prices remain unchanged, maintaining their respective rates of Sh214.03 and Sh191.38 per litre. The decision follows a broader economic context marked by rising inflation, with the annual consumer price index (CPI) registering at 6.5 per cent in July. This figure represents a slight increase from the previous month’s rate of 6.4 per cent, driven largely by surges in food and transport costs. Food inflation reached 9.0 per cent, up from 8.6 per cent in June, while transport costs surged to 15.6 per cent, the highest among all categories. These increases have placed considerable strain on households and businesses alike, prompting the government to implement targeted interventions to curb inflationary pressures. According to EPRA Acting Director General Dr Eng Joseph Oketch, the Sh5 reduction in diesel prices is part of a larger strategy involving government stabilisation support measures worth Sh938 million. This funding aims to cushion the impact of fluctuating global oil prices and ensure affordability for consumers. The move is also influenced by a notable decline in the landed cost of diesel, which fell by 13.08 per cent in June to Sh111,226 per cubic metre. Similarly, kerosene prices saw a 11.01 per cent drop, reaching Sh118,951 per cubic metre. However, super petrol prices increased slightly, rising by 6.99 per cent to Sh123,359 per cubic metre. The government has also introduced tax relief measures, reducing the Value Added Tax (VAT) on fuel from 16 per cent to 8 per cent. This reduction, initially implemented in response to disruptions caused by the U.S.-Iran conflict and the subsequent blockade of the Strait of Hormuz, has been extended for another three months. Cabinet Secretary Opiyo Wandayi highlighted that these measures are crucial for supporting import activities and maintaining supply chain stability. Additionally, the government has secured alternative supply routes through agreements with Saudi Arabia and the United Arab Emirates, ensuring continued access to essential fuels despite ongoing geopolitical tensions. Industry stakeholders have welcomed the diesel price cut, viewing it as a step toward mitigating inflationary pressures. However, some experts caution that the limited scope of the adjustments, particularly the retention of super petrol and kerosene prices, may not fully address the underlying economic challenges. The focus on diesel reflects the sector's critical role in both transportation and industrial operations, areas heavily impacted by rising costs. Meanwhile, the persistence of high transport costs continues to pose a challenge, especially for rural communities reliant on fuel for daily mobility. Looking ahead, the government is expected to continue monitoring inflation trends and adjusting policies accordingly. With the VAT relief set to expire on October 14, there may be further discussions on extending or modifying the measure. The success of the current policy will depend on how effectively the combined efforts of fiscal support, international trade agreements, and domestic market regulation can stabilize prices and restore confidence among consumers and investors. For now, the Sh5 diesel price cut stands as a tangible, albeit partial, response to the complex interplay of economic forces shaping Kenya’s current landscape.
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