Fuel Prices Surge Ahead of EPRA Review as Iran Shuts the Strait of Hormuz
The development comes just days before the Energy and Petroleum Regulatory Authority (EPRA) is set to conduct its monthly fuel price review, raising concerns among consumers and businesses over a potential spike in pump prices.
Global crude oil prices have surged past Ksh12,800 (USD 100) per barrel following the closure, a significant jump driven by escalating geopolitical tensions involving Iran, United States, and Israel. The move has disrupted a key shipping corridor that handles nearly 20 per cent of the world’s oil and gas supply.
Energy analysts warn that the closure will directly affect Kenya’s fuel pricing structure, particularly the landing cost—the price at which imported petroleum products arrive at the Port of Mombasa—which EPRA uses to determine retail pump prices.
“Any disruption along the Strait of Hormuz significantly affects global supply chains, and Kenya, as a net importer, will inevitably feel the impact through higher landing costs,” an energy sector analyst noted, highlighting the immediate ripple effects of the crisis.
The Kenyan government’s government-to-government (G-to-G) fuel import deal with suppliers from Saudi Arabia had initially cushioned consumers from global price volatility. However, the current crisis threatens to undermine that arrangement.
While the agreement includes fixed freight charges, emerging risks such as higher insurance premiums and the need for alternative, longer shipping routes could significantly raise overall costs. Tankers may be forced to bypass the Gulf entirely, rerouting around the African continent—a move that increases both transit time and expenses.
“Even with stable supply agreements, logistics and insurance costs are likely to rise sharply, and these will ultimately be passed on to consumers,” the analyst added.
The Strait of Hormuz has long been regarded as the most cost-effective route for transporting oil from Gulf producers, including Saudi Arabia and the United Arab Emirates. Its closure has effectively halted or delayed shipments, tightening global supply and driving up prices.
This looming increase comes in stark contrast to the most recent EPRA review for the February 15 to March 14 cycle, which saw a reduction in fuel prices. During that period, Super Petrol prices dropped by Ksh4.24 to retail at Ksh178.28 per litre, Diesel fell by Ksh3.93 to Ksh166.54, and Kerosene declined by Ksh1.00 to Ksh152.78.
The price cuts were attributed to a decrease in landed costs, with Super Petrol dropping by 2.69 per cent, Diesel by 6.37 per cent, and Kerosene by 1.44 per cent between December 2025 and January 2026.
However, the current geopolitical crisis has reversed those gains. Even before the closure of the Strait, oil prices had already climbed to over Ksh8,500 (USD 67) per barrel—the highest level since August 2025—driven by rising tensions in the Middle East.
Consumers, transport operators, and manufacturers are bracing for higher costs, with fears that increased fuel prices could trigger a broader rise in the cost of living.
As the situation unfolds, policymakers face mounting pressure to mitigate the impact on households while navigating an increasingly volatile global energy market.
With no immediate resolution to the Gulf crisis in sight, Kenya’s fuel outlook remains uncertain, underscoring the country’s vulnerability to external shocks in the global oil supply chain.
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Fuel Prices Surge Ahead of EPRA Review as Iran Shuts the Strait of Hormuz
