The wallets of Kenyans are once again feeling the squeeze as the Energy and Petroleum Regulatory Authority (EPRA) announced significant increases in fuel prices. Effective midnight for the next 30 days, Super Petrol, Diesel, and Kerosene in Nairobi now retail at KSh186.31, Ksh171.58, and Ksh156.58 per litre respectively, marking sharp jumps of KSh8.99, KSh8.67, and KSh9.65. This monthly review from EPRA exacerbates an already strained cost of living, directly impacting everything from daily transport costs to the price of basic foodstuffs and household budgets.
But this isn't solely a Kenyan phenomenon. The recent surge at local pumps is a direct reflection of a complex and alarming increment in global oil prices, a trend observed from Nairobi to major cities like those across Canada. Understanding these interconnected global factors is key to grasping why your fuel bill keeps rising.
The Geopolitical Tinderbox: Middle East Tensions Ignite Oil Prices
A primary driver behind the current global oil price surge is the escalating tension in the Middle East, particularly between Iran and Israel. Fears that this regional conflict could draw in other nations, either through diplomatic or military involvement, send jitters through the international oil markets.
Petroleum analysts, such as Patrick De Haan at GasBuddy, observed a dramatic 10 percent jump in oil prices late last week following initial attacks. This immediate reaction underscores the region's critical role as a major oil producer, with nations like Saudi Arabia and other OPEC+ partners supplying a significant percentage of global oil imports. Any perceived threat to supply stability from this vital region instantly translates into higher prices at the pump worldwide.
Beyond Conflict: The Interplay of Supply, Demand, and Tariffs
While geopolitical instability is a major catalyst, several other factors contribute to the unpredictable nature of global fuel costs:
- Crude Oil Supply and Demand Dynamics: At its core, the price of crude oil is governed by the classic economic principle of supply versus demand. The global inventory of oil barrels against anticipated consumer need dictates price movements. If demand is expected to decline due to economic slowdowns, oil companies may preemptively lower prices. Conversely, expectations of increased demand, particularly during peak seasons, prompt a rise in prices.
- Global Trade Wars and Tariff Policies: The ripple effects of global trade policies, including those on tariffs, significantly influence oil prices. Economists have consistently warned that tariffs could potentially lead to a global recession, and a downturn in economic output typically translates to a reduction in fuel consumption. Oil companies, setting prices based on projected near-term demand, react to these economic forecasts. For instance, when the U.S. began implementing widespread tariffs in early April, Canada's national average gas price saw its lowest point of the year, driven by expectations of reduced demand.
- Seasonal Demand Fluctuations: The predictable rhythm of seasonal demand also plays a role. Summer months, for example, typically see peak demand for fuel due to increased travel by cars, planes, and recreational vehicles. To prepare for this surge, oil companies modify production and stockpile reserves, often leading to higher prices just before and during this period. However, analysts suggest that prices could normalize as the summer progresses and supply builds, provided no new geopolitical shocks or events like hurricane season impact refining capacity.
The Kenyan Context: More Than Just Global Forces
For Kenya, these global factors are compounded by domestic considerations. Allegations of new, quietly introduced fuel levies to secure loans further burden consumers, adding to the already soaring prices. While EPRA attributes the current hikes primarily to increases in the landed cost of imported products (Super Petrol by 6.45%, Diesel by 6.27%, and Kerosene by 6.95% between May and June 2025), the underlying global market volatility and domestic taxation policies create a potent cocktail of economic pressure.
The immediate impact on Kenyans is profound: higher transport fares, increased food costs due to elevated logistical expenses, and a general tightening of household budgets already strained by inflation. Until global tensions ease, and comprehensive, transparent domestic policies are reviewed, Kenyans, like consumers worldwide, will continue to face the brunt of these escalating fuel prices.
