EPRA August review: Why falling oil prices may not lower Kenya’s fuel prices

Kenyan consumers are eagerly anticipating the outcome of the Energy and Petroleum Regulatory Authority's (EPRA) August fuel price review, hoping that recent drops in global oil prices will result in lower fuel costs. However, the review is set to take place on August 14, 2026, with the new prices coming into effect from August 15.

Fuel prices in Nairobi currently stand at Ksh214.03 per litre for petrol, Ksh222.86 for diesel, and Ksh191.38 for kerosene. The question remains whether the recent decline in global crude prices will translate into cheaper fuel in Kenya. The answer is not straightforward, as EPRA considers various factors beyond just the cost of crude oil, such as landed costs, storage, distribution, taxes, levies, and other components.

While global oil prices have indeed fallen sharply in the week ending August 6, according to the Central Bank of Kenya, the extent to which this decline will impact Kenya's fuel prices is uncertain. Kenya's fuel imports, which are highly sensitive to changes in international fuel costs, freight, and maritime transport, play a significant role in determining the final retail prices.

EPRA's pricing formula takes into account the landed cost of petroleum products, which includes the cost of acquiring and delivering fuel to Kenya, along with other regulated components. This means that a drop in crude prices may not automatically lead to a corresponding reduction at local filling stations. Geopolitical tensions in the Middle East, which have been affecting oil prices worldwide, are also relevant to the EPRA review.

While government-to-government fuel arrangements might provide temporary relief to consumers, sustained increases in international oil prices will eventually be reflected at local pumps. The arrival of fresh fuel shipments in Kenya's ports, such as Mombasa and Lamu, has helped bolster the country's immediate supply position. However, even with increased supply, the impact on fuel prices during the August review depends on the relevant landed costs and other factors considered by EPRA.

The shifting pattern of Kenya's petroleum imports, with a notable increase in imports from Saudi Arabia compared to the UAE, highlights how geopolitical events can alter fuel-supply routes and affect the domestic market. The rise in Kenya's fuel import bill by 46% to Ksh334.24 billion in the first five months of the year underscores the country's financial exposure to international energy-market volatility.

The EPRA August review is not merely about the price at filling stations; it has broader economic implications, affecting transportation, logistics, electricity generation, and business operating expenses. Therefore, the more crucial question to consider is whether the recent decline in international crude prices is sufficiently large to offset the other costs incorporated in Kenya's fuel-pricing formula.

Motorists should focus on three key factors: the landed cost of petroleum products, international shipping conditions, and the extent to which global oil-price declines have trickled down to import costs. While new fuel cargoes are encouraging for supply, they alone do not determine whether petrol, diesel, or kerosene prices will rise or fall.

Government-to-government fuel arrangements may offer some protection against sudden supply disruptions and extreme price movements, but the Middle East crisis will continue to have a significant impact on Kenya's fuel market.