Who Controls Petrol and Diesel Prices in Kenya?

Who Controls Petrol and Diesel Prices in Kenya? Understanding EPRA’s Powers, Taxes and the Fuel Pricing Formula

The Energy and Petroleum Regulatory Authority (EPRA) is the institution legally responsible for determining the maximum retail prices of petrol, diesel and kerosene in Kenya. However, the price motorists pay at the pump is influenced by several factors, including international petroleum prices, the cost of importing fuel, the exchange rate, taxes, government policies and the expenses involved in transporting and distributing petroleum products.

The question of who controls fuel prices has returned to the national conversation as Kenyans await new pump prices for the October–November 2026 period. EPRA scheduled its latest monthly review for Wednesday, October 14, with the new prices expected to take effect from midnight on October 15.

The review comes amid concerns about international oil prices and their potential effect on the cost of importing petroleum products. It has also attracted political attention, with former Deputy President Rigathi Gachagua alleging that President William Ruto had ordered increases of KSh12 per litre for petrol and KSh9 for diesel. Those claims are political allegations and should not be treated as established facts without supporting evidence.

Energy and Petroleum Cabinet Secretary Opiyo Wandayi has maintained that fuel prices are determined by EPRA under the applicable legal framework. The distinction is important because it separates the authority responsible for calculating and publishing maximum pump prices from the government institutions responsible for taxation, policy and other measures that can influence what consumers ultimately pay. <Cite refs={[“turn899404view0″,”turn820440news18″,”turn820440news9”]}/>

Understanding how the system works can help motorists, public transport operators, businesses and households make sense of monthly price changes. It also explains why a fall in international oil prices does not always translate into an immediate reduction at Kenyan petrol stations.

EPRA Has the Legal Authority to Set Maximum Fuel Prices

EPRA is the primary regulator responsible for determining the maximum wholesale and retail prices of regulated petroleum products in Kenya.

The authority was established under Section 9 of the Energy Act, 2019, replacing the former Energy Regulatory Commission. The law gives it responsibilities across the energy sector, including regulating petroleum importation, transportation, storage and sale.

Sections 10 and 11 of the Energy Act outline the authority’s functions and powers. These include protecting consumer interests, licensing businesses, monitoring compliance with regulations and enforcing applicable requirements in the energy sector.

For fuel prices, the relevant legal framework includes Section 101(y) of the Petroleum Act, 2019, and the Petroleum (Pricing) Regulations, 2022.

Under this framework, EPRA calculates and publishes maximum wholesale and retail prices for petrol, diesel and kerosene each month. The published prices generally apply from the 15th day of one month until the 14th day of the following month.

The word maximum is important. EPRA establishes the highest permitted prices for regulated products in specified locations. Licensed dealers cannot lawfully sell those products above the applicable maximum prices.

This arrangement means individual petrol station owners do not have unrestricted freedom to set any price they wish. Their operations are subject to the regulator’s pricing requirements, alongside other applicable laws and licensing conditions.

EPRA’s role also extends beyond announcing prices. The authority oversees compliance, monitors petroleum businesses and can take enforcement action where applicable rules are breached.

For consumers, this provides a regulatory framework intended to prevent excessive pricing and establish a common reference point for checking fuel charges.

However, EPRA does not determine every component of the price independently of other economic and policy decisions. It applies a prescribed formula that incorporates import costs, transportation, storage, taxes and approved commercial margins.

Consequently, when motorists ask why petrol has become more expensive, the answer often requires examining several components rather than looking at the regulator alone.

The Government Also Influences Fuel Prices

Although EPRA calculates and publishes maximum pump prices, the government influences the overall cost of fuel through taxation, policy decisions and targeted interventions.

The National Treasury and Parliament have important roles in determining the legal framework for taxes and levies. Changes to applicable tax laws can increase or reduce the amount included in the final pump price.

The Ministry responsible for petroleum also plays a policy role. It oversees the broader petroleum sector and works with relevant government institutions on issues involving fuel supply, importation arrangements and consumer protection.

The government can also introduce measures intended to cushion consumers against sharp increases in international petroleum costs. Depending on the legal and fiscal arrangements, such measures may include adjustments to applicable taxes or the use of funds from designated levies to support price stabilisation.

For example, during the July–August 2026 pricing period, the government announced a KSh945 million subsidy from the Petroleum Development Levy Fund and an extension of the 8 per cent VAT rate on petroleum products to help maintain fuel prices.

Such interventions demonstrate that fuel prices are influenced by more than the regulator’s calculations alone. Government decisions can affect the amount of tax charged, the funding available to cushion consumers and the wider policy environment in which fuel is imported and sold.

However, this does not mean that an individual political leader can lawfully change the pump price simply by issuing an instruction. EPRA’s statutory role and the applicable pricing regulations govern the official determination of maximum prices.

When claims emerge that a political leader has ordered a particular increase, the relevant questions include whether there is documentary evidence of the alleged instruction, what the official pricing calculations show and whether the announced prices comply with the governing framework.

This distinction matters because fuel prices affect millions of Kenyans. Public discussion should therefore distinguish between documented decisions, political accusations and the legal procedures that determine prices.

How the Fuel Pricing Formula Works

The maximum retail price is calculated using a formula designed to account for the costs incurred as petroleum products move from international suppliers to consumers.

EPRA’s published formula includes the landed cost of imported fuel, handling and storage expenses, transportation costs, inventory financing, approved wholesale and retail margins, applicable taxes and VAT.

These components help explain why the pump price is not simply the international price of crude oil converted into Kenyan shillings.

First, Kenya must pay for the petroleum products it imports. The cost of these products is influenced by international market quotations, contractual arrangements and the relevant pricing period.

Second, the fuel must be handled at the port, stored, transported through the distribution network and delivered to retail stations. These activities incur costs that are incorporated into the regulated pricing framework.

Third, the formula includes applicable taxes and approved commercial margins. These cover the regulated costs and margins associated with wholesale and retail operations.

The final amount is calculated in accordance with the applicable regulations and published for each designated pricing location.

The formula therefore provides a structured method of translating the cost of imported petroleum into a maximum retail price.

EPRA publishes the relevant pricing methodology on its official website, including the components used to calculate maximum wholesale and retail prices.

Understanding the formula is particularly important when comparing movements in international oil markets with changes at local petrol stations. The two do not necessarily move by identical amounts or at precisely the same time.

International Oil Prices Have a Direct Impact

One of the biggest influences on Kenya’s fuel prices is the cost of petroleum products in international markets.

Kenya relies heavily on imported petroleum, leaving domestic consumers exposed to changes in global supply and demand. When international prices rise, importing fuel can become more expensive. If those higher costs are reflected in the landed cost used in EPRA’s calculation, they can place upward pressure on local pump prices.

Conversely, lower international prices can create room for reductions, provided other components do not offset the decline.

International prices can change because of geopolitical tensions, disruptions to shipping routes, production decisions, changes in demand and uncertainty about future supplies.

For instance, concerns about disruptions in the Middle East can influence oil-market expectations because the region is a major source of global petroleum supplies. Threats to shipping routes or production facilities may increase the cost of crude oil and refined petroleum products.

A report published by People Daily on October 9, 2026, cited Central Bank of Kenya figures showing that Murban crude rose from approximately KSh12,422 per barrel on October 1 to KSh13,214 on October 8 when converted into Kenyan shillings at the respective exchange rates. That represented an increase of about 6.4 per cent over the period.

Such movements can influence expectations ahead of a monthly fuel review. However, they do not automatically determine the exact change in petrol or diesel prices.

EPRA must consider the relevant costs of imported petroleum products and the other components prescribed by the pricing formula.

The distinction between crude oil and refined petroleum products is also important. Petrol and diesel are refined products whose international prices may move differently from the price of crude oil.

As a result, a headline increase in crude oil prices does not necessarily translate into an identical percentage increase in the price of petrol or diesel at the pump.

Why the Kenyan Shilling Matters

The exchange rate is another major factor in determining the cost of imported fuel.

International petroleum transactions are commonly priced in US dollars, while consumers in Kenya pay for fuel in Kenyan shillings. When the shilling weakens against the dollar, the country generally needs more shillings to purchase the same dollar-priced quantity of fuel.

This can increase the landed cost of imported petroleum, even when international prices remain unchanged.

For example, imagine that an importer must pay US$1 million for a shipment of fuel. If the exchange rate moves from KSh130 per dollar to KSh135, the shilling amount required to purchase those dollars rises from KSh130 million to KSh135 million.

The difference is KSh5 million before considering other costs. This simplified illustration shows how currency movements can affect the cost of importing petroleum.

The reverse can also happen. If the shilling strengthens against the dollar, the local-currency cost of a dollar-priced shipment may fall, all other factors remaining equal.

However, exchange-rate movements do not operate in isolation. International petroleum prices, transport costs, taxes and other components can offset or amplify the effect of a stronger or weaker shilling.

The Central Bank of Kenya monitors monetary and foreign-exchange conditions, but it does not set petrol and diesel pump prices. EPRA remains responsible for applying the regulated petroleum pricing framework.

For consumers, the exchange rate is therefore an important background factor to watch when assessing why the price of imported fuel may rise or fall.

Taxes and Levies Form Part of the Pump Price

Taxes and levies are another important component of the price motorists pay at petrol stations.

The applicable tax framework determines how much is included in the final price through VAT, excise duty and other legally prescribed charges. The precise rates and treatment can change following amendments to legislation or other lawful government measures.

These taxes contribute to public revenue, but they also influence the cost of fuel for households and businesses.

When taxes increase, the final pump price may rise if the additional cost is passed through under the pricing formula. When taxes are reduced, the change may help limit an increase or create room for lower prices.

The effect depends on the particular tax adjustment and the other components of the calculation.

Government decisions to change VAT or provide a subsidy are therefore relevant to fuel pricing, even though EPRA remains the institution that calculates and publishes the maximum retail price.

The relationship between taxes and fuel prices can also become a subject of public debate when international petroleum prices fall but consumers see little reduction at the pump.

In such circumstances, a proper assessment requires examining whether the cost of imported products fell, whether other costs increased and whether the tax treatment changed during the relevant period.

Comparing crude oil prices alone is not sufficient to determine whether a retail price adjustment is justified.

Greater public access to the figures used in the calculation can help consumers understand the reasons for changes and assess whether the pricing framework is being applied consistently.

Why Petrol and Diesel Prices Can Move Differently

Although petrol and diesel are both petroleum products, their prices do not always change by the same amount.

This is because they have different international market prices, import costs and demand patterns. The landed cost of petrol may decline while the landed cost of diesel increases, or the reverse may occur.

Diesel is particularly important to Kenya’s economy because it powers many commercial vehicles, buses, trucks, agricultural machines, construction equipment and industrial operations.

Petrol is widely used by private vehicles, motorcycles and other petrol-powered transport.

Changes in diesel prices can therefore have consequences that extend well beyond motorists who purchase the fuel directly. Higher diesel costs can increase the operating expenses of transporters and businesses moving food, construction materials and other goods around the country.

Businesses may respond to increased fuel expenses by adjusting transport charges or product prices, depending on their operating costs and competitive conditions.

Petrol price changes can also affect household budgets and the cost of operating private and commercial vehicles.

Kerosene, meanwhile, has its own import-cost and pricing components, making it possible for the three regulated products to experience different movements during the same review.

This is why EPRA publishes separate maximum prices for Super Petrol, Automotive Diesel and Kerosene rather than applying one uniform adjustment to all products.

Why Lower Global Prices Do Not Always Mean Cheaper Fuel Immediately

Many consumers expect fuel prices in Kenya to fall as soon as international oil prices decline. However, the relationship is more complicated because the local pricing system considers the relevant import costs and other expenses under a prescribed methodology.

The timing of fuel imports matters. Products may have been purchased or priced during an earlier period, meaning changes in international markets may take time to be reflected in the cost used for the next review.

In June 2026, reports on changes to the fuel pricing methodology explained that the pricing of imported cargoes would be linked to average international product prices from specified preceding periods. The adjustments were intended to improve consistency in how import costs were calculated.

The timing of these calculations can affect how quickly market movements are reflected in the retail price.

Other components can also change. A decline in the international price of petrol may be partly offset by a weaker shilling, higher transport expenses or changes in other costs included in the formula.

Similarly, a rise in international prices does not always lead to an immediate increase at the pump if other factors or government interventions offset the additional cost.

This helps explain why EPRA may retain prices even when different components of the pricing formula have moved in opposite directions.

For consumers, the most reliable way to understand a monthly adjustment is to examine the regulator’s official notice and the accompanying import-cost information rather than relying solely on movements in global crude oil prices.

What Power Do Petrol Station Owners Have?

Petrol station owners and oil marketers play an important role in distributing fuel, but their pricing decisions are constrained by the maximum prices published by EPRA.

Licensed retailers must comply with the applicable price limits and other regulatory requirements. They cannot lawfully charge above the published maximum retail price for the relevant product and location.

The regulations also require retailers to display the applicable prices so consumers can make informed decisions before purchasing fuel.

This requirement helps customers compare prices against the official schedule and identify possible violations.

The maximum price may differ between towns because the formula takes account of distribution and transportation costs, among other factors. Motorists should therefore check the price applicable to their particular location rather than assuming that every station in the country must display an identical figure.

Consumers who suspect that a petrol station is charging above the permitted price can consult EPRA’s official price list and use the authority’s official channels to report a concern.

EPRA’s regulatory powers include monitoring petroleum businesses and enforcing compliance with applicable rules. The authority also oversees other aspects of the petroleum sector, including licensing and relevant safety and quality requirements.

The system is designed to give consumers a clear reference point while allowing licensed businesses to operate within an established regulatory framework.

Political Claims and the Importance of Transparency

Fuel prices often become a political issue because they affect almost every part of the economy.

When petrol or diesel prices rise, motorists may face higher operating costs, transport operators may come under pressure to adjust fares, and businesses may encounter higher expenses when moving goods.

These effects can create public pressure on the government and the regulator to explain why prices have changed.

The October 2026 review has attracted political attention following Gachagua’s allegations that President Ruto ordered increases of KSh12 per litre for petrol and KSh9 for diesel.

The allegation should be distinguished from the formal process used to determine prices. The legal framework assigns EPRA responsibility for calculating and publishing maximum pump prices according to the applicable formula, while the government has influence over policy and taxes.

Energy Cabinet Secretary Opiyo Wandayi has defended EPRA’s role and challenged Gachagua to raise his concerns directly with the ministry responsible for the sector.

The key issue for consumers is not merely which political figure is blamed for a price change. It is whether the official calculation can be understood, whether the applicable law has been followed and whether any government intervention has been clearly explained.

Transparency is particularly important when prices rise sharply or when the government announces measures intended to cushion households.

Publishing the relevant figures and explaining the reasons for each adjustment can help reduce confusion and make public debate more evidence-based.

It also allows motorists, businesses, journalists and consumer organisations to compare the announced prices with the components used in the formula.

What Can Consumers Do When Fuel Prices Change?

Although individual consumers cannot control international petroleum prices or the statutory pricing framework, they can take practical steps to understand and manage fuel expenses.

Motorists can check EPRA’s official price list before refuelling, particularly when travelling between towns where maximum prices may differ.

They can also monitor the monthly announcements to understand when a new pricing period begins and whether the prices of petrol, diesel or kerosene have changed.

For drivers, maintaining vehicles properly, checking tyre pressure, avoiding unnecessary idling and planning journeys efficiently can help reduce fuel consumption. These measures do not change the price per litre, but they may reduce the total amount spent on fuel.

Businesses that depend heavily on diesel can monitor fuel expenses as part of their operating budgets and assess how changes in transport costs may affect their services.

Consumers who believe a station has charged more than the permitted price can compare the displayed rate with EPRA’s published maximum and report suspected violations through the authority’s official channels.

Public awareness is important because the pricing framework can protect consumers only when people understand the applicable rules and know where to seek reliable information.

Who Ultimately Controls Petrol and Diesel Prices in Kenya?

The answer depends on what is meant by control.

EPRA has the legal responsibility to calculate and publish maximum wholesale and retail fuel prices under Kenya’s petroleum pricing framework. Petrol station owners must operate within those limits.

The government influences prices through taxation, levies, petroleum policy and lawful measures intended to cushion consumers against international price volatility. International suppliers, global petroleum markets and exchange-rate movements also influence the costs that feed into the calculation.

No single factor explains every change at the pump. The final price reflects the combined effect of import costs, distribution expenses, taxes, approved margins and other components recognised under the regulations.

As Kenyans await the October–November 2026 pricing schedule, the main issue is how these factors are reflected in the official calculations and whether the resulting prices comply with the legal framework.

For motorists and businesses, understanding the system can help separate verified information from political claims and speculation. For the authorities, clear explanations and transparent calculations are essential to maintaining public confidence.

Ultimately, EPRA is the institution that sets the official maximum pump prices, but the cost of fuel is shaped by a wider network of international markets, domestic economic conditions and government policy decisions.