Energy CS Opiyo Wandayi Explains Why Fuel Prices May Not Fall Immediately Despite Middle East Stability

Energy CS Opiyo Wandayi Explains Why Fuel Prices May Not Fall Immediately Despite Middle East Stability

Kenyans hoping for an immediate drop in fuel prices following signs of easing tensions in the Middle East may have to wait a little longer, with Energy Cabinet Secretary Opiyo Wandayi explaining that the country’s fuel pricing system does not respond instantly to global market changes.

Speaking during a televised interview on Monday, June 15, Wandayi said consumers could begin experiencing more substantial reductions in pump prices from August if stability is maintained in the Middle East and the strategic Strait of Hormuz remains fully operational.

The CS noted that although developments in the region have a direct impact on global oil markets, Kenya’s fuel pricing mechanism is structured in a way that causes a delay between international price movements and local pump price adjustments.

Global Stability Could Ease Pressure on Fuel Costs

Wandayi explained that any sustained improvement in oil supply chains and shipping routes would eventually benefit Kenyan consumers, but cautioned against expectations of immediate reductions at petrol stations.

“When the situation in the Middle East stabilises and there is a resumption of normal supply along the Strait of Hormuz, we will be able to see the benefits come down to consumers, but it cannot be instant,” Wandayi stated.

The Strait of Hormuz is one of the world’s most important maritime routes, carrying a significant portion of globally traded crude oil and petroleum products. Any disruption in the corridor often triggers sharp increases in international oil prices, affecting fuel-importing nations such as Kenya.

Recent reports suggesting progress in diplomatic engagements between the United States and Iran have sparked optimism among global energy markets, raising hopes that uninterrupted oil flows could help lower international fuel prices in the coming months.

According to energy analysts, stability in the region could improve supply predictability and reduce the risk premiums that often push up the cost of petroleum products.

How Kenya’s Fuel Pricing Formula Works

The Energy CS explained that Kenya’s pricing framework relies on international benchmark prices from the previous month rather than current market rates.

As a result, fuel imported and discharged into the country during a particular month is priced using data from the preceding month, creating a lag effect that delays the transmission of global price changes to local consumers.

“Fuel that is discharged in month X is priced against international benchmark prices of X minus one. Therefore, any benefit arising from stability will come to consumers progressively,” he explained.

This means that even if international oil prices were to fall sharply in June due to geopolitical developments, Kenyan consumers would likely begin feeling the impact in subsequent pricing cycles, potentially around August.

Industry experts say the approach is designed to provide predictability in pricing and shield the market from sudden fluctuations, although it can also delay the benefits of falling global prices.

Subsidies Continue to Cushion Consumers

Wandayi further revealed that current fuel prices are already being moderated through government intervention, particularly through subsidy mechanisms aimed at protecting consumers from high global energy costs.

According to the CS, any future reductions announced by the government would be calculated from the actual market cost of fuel before subsidies are applied.

“The prices we are currently offering at the pump stations are a result of fuel subsidy. Any reduction will have to come from the actual price, not the subsidised prices,” he said.

His remarks come just days after the Energy and Petroleum Regulatory Authority (EPRA) announced new fuel prices for the June–July review period.

Under the latest review, diesel prices dropped by Ksh10 per litre to retail at Ksh222.86 in Nairobi, while petrol prices fell marginally by Ksh0.22 to Ksh214.03 per litre. Kerosene prices remained unchanged.

Consumers Watching Global Developments Closely

Fuel prices remain a critical issue for households, businesses, and transport operators, given their direct impact on the cost of living and economic activity.

With global oil markets continuing to react to geopolitical developments, shipping conditions, and supply agreements, many Kenyans will be closely monitoring developments in the Middle East over the coming weeks.

Should stability persist and international crude prices continue trending downward, consumers may finally begin to see more meaningful relief at the pump later in the year, offering a welcome boost to household budgets and business operations across the country.

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Energy CS Opiyo Wandayi Explains Why Fuel Prices May Not Fall Immediately Despite Middle East Stability