Kenya’s Petroleum Supply: Statement on Global Market Trends and Energy Security

In recent days, many Kenyans have understandably been following developments in the Middle East, particularly the renewed military escalation around Strait of Hormuz.

These have resulted in attacks on commercial vessels, reduced oil tanker traffic through the Strait of Hormuz to its lowest level in approximately two months, and heightened uncertainty across international energy markets.

Our supply remains secure

The market remains unsettled, and the Strait of Hormuz remains constrained, with commercial traffic running well below its usual levels and the daily Platts assessments moving sharply from one session to the next as events in the region continue to unfold.

In a market of this kind, world prices can move either way within a week.

What we can state plainly is this:

Kenya’s fuel supply has held firm throughout. Under our Government-to-Government arrangement, cargoes have continued to be sourced from a wider set of loading regions beyond the Gulf, every scheduled cargo has arrived and offloaded on time, and fuel has remained available at the pump throughout the country.

The value of the Government-to-Government arrangement

This is precisely the environment in which the value of the Government-to-Government arrangement is felt most.

While importers who depend on spot purchases and open tenders have watched their freight and insurance costs climb again with each fresh disruption, Kenya has continued to pay the same fixed freight and premium.

That fixed cost, held constant while benchmark prices swing, is what has kept our landed costs in check and our deliveries on schedule, and it has allowed our suppliers to load from alternative regions without passing the cost of that flexibility on to the Kenyan motorist.

The arrangement is doing exactly what it was built to do, and its advantage grows sharper the more volatile the market becomes.

Prices and the way forward

With the restart of the Middle East crisis, international benchmarks have now begun to climb again, and this renewed pressure will be reflected in the pricing cycles that follow.

This Ministry will continue to work closely with the industry to keep supply consistent and uninterrupted, to defend the fixed terms of our Government-to-Government arrangement, and to keep Kenyans fully and openly informed as the picture continues to develop.

Against this backdrop, I wish to assure all Kenyans that these global developments have not affected the availability of petroleum products in our country.

Fuel remains readily available across the country, supported by adequate national stocks, a resilient and fully operational import and distribution system, and the continued success of the Government-to-Government (G2G) fuel supply arrangement, which has strengthened Kenya’s energy security while reducing pressure on foreign exchange demand.

This arrangement has enhanced supply predictability, improved resilience within our petroleum supply chain and strengthened our ability to navigate periods of global market uncertainty.

As a Government, we have invested significantly in building a more resilient petroleum sector that is better equipped to withstand external shocks.

The systems, partnerships and strategic interventions we have put in place over the past few years continue to provide confidence that Kenya can maintain a reliable and uninterrupted fuel supply, even as global markets experience heightened volatility.

In addition, as part of the Government’s commitment to cushioning households and businesses from international market volatility, in consultation with the National Treasury, we have extended the application period for 8% of Value Added Tax (VAT) on petroleum products for a further three months, until 14th October 2026.

Further, in the July-August 2026 pricing cycle, the Government will deploy a subsidy from the Petroleum Development Levy to the tune of Kshs.945 Million to sustain the current price levels.

These interventions reflect our broader commitment to protecting consumers, supporting businesses and safeguarding the economy from external shocks while ensuring that petroleum products remain as affordable as possible under prevailing global market conditions.

I therefore wish to reassure motorists, public transport operators, manufacturers, farmers, businesses, investors and all consumers that there is adequate fuel across the country and that the Government remains steadfast in ensuring that that particular situation continues to obtain for the long haul.