President William Ruto has come out swinging in defence of the latest fuel price hike that has sent petrol and diesel soaring past the KSh200 mark, asserting that a KSh6.5 billion subsidy and tax cuts have spared Kenyans from an even more devastating blow.

Addressing a roadside rally in Kisii County just hours after the Energy and Petroleum Regulatory Authority’s (EPRA) staggering review, the Head of State acknowledged the pain at the pump but placed the blame squarely on escalating geopolitical tensions in the Middle East.

“The price of fuel has increased everywhere in the world, but in Kenya, we had planned to ensure that the prices, which would have increased very highly, were moderated,” Ruto said, as he sought to reassure a public already grappling with a rising cost of living.

The President’s remarks came amid a wave of political backlash, with opposition leaders giving his administration a seven-day ultimatum to reverse course or face nationwide protests.

Record Hike Pushes Pump Prices Past KSh200

In a review effective from April 15, 2026, EPRA announced a sharp upward revision in the maximum retail prices for petroleum products, pushing diesel and petrol costs to historic highs in Nairobi and other major towns. Diesel surged by a staggering KSh40.30 per litre to retail at KSh206.84, while petrol increased by KSh28.69 per litre to KSh206.97. Kerosene prices were, however, maintained at KSh152.78, cushioned by a significant subsidy. 

The regulator attributed the spike to a surge in global oil prices and escalating shipping costs, largely linked to the ongoing conflict involving Iran, the United States, and Israel. The blockade of the Strait of Hormuz – a critical route through which roughly a quarter of the world’s petroleum passes – has compounded the crisis, disrupting supply chains and driving up the landed cost of petroleum products, with diesel imports rising by over 68% in March. 

Global Shockwaves: How Middle East Conflict is Hitting Kenyan Pumps

The current crisis is no ordinary market fluctuation. On February 28, 2026, the US and Israel launched “Operation Epic Fury,” abruptly altering the geopolitical landscape and effectively turning the Strait of Hormuz into a war zone. Tanker traffic has slowed to a trickle, Platts price assessments for Gulf loadings have been suspended in parts, and refined product benchmarks have exploded. Brent crude has surged past $110 a barrel, with some Dubai assessments touching $167. 

“For Kenya, this is not abstract geopolitics,” wrote energy analyst Juma Kilonzo in a recent column for the Business Daily. “It is a direct assault on the very pricing formula that underpins the Government-to-Government (G2G) petroleum import arrangement.” 

Shipping disruptions have further compounded the crisis. Major carriers such as Maersk, Hapag‑Lloyd, and CMA CGM have suspended many routes through the Red Sea corridor, rerouting vessels around Africa. This shift is dramatically increasing shipping times by 10 to 14 days and sharply raising fuel and staffing costs.  War-risk insurance premiums in the Red Sea have jumped from about 0.3–0.4% to close to 1% of a ship’s value. For a $100 million tanker, that translates into nearly $1 million in added insurance per voyage. 

Analysts warn that a full disruption of both the Strait of Hormuz and the Bab al‑Mandeb chokepoint could push oil prices toward $120 or higher, threatening nearly 25–30% of global seaborne oil supply.  In such a scenario, the ripple effects on import-dependent economies like Kenya would be immense.

Ruto’s Defence: Subsidies, VAT Cut, and the G-to-G Lifeline

President Ruto maintained that despite the increases, the government had taken deliberate steps to prevent an even heavier burden on consumers. “The government has used KSh6.5 billion to subsidise fuel costs in Kenya. We have also reduced VAT to ensure that we moderate fuel prices, and I want to assure you that my government will do all it can,” Ruto stated. 

In a move aimed at offering temporary relief, Ruto announced that fuel VAT will be reduced from 16 per cent to 8 per cent for the next three months.  The president also praised the government-to-government arrangement with three state-owned Gulf firms – Saudi Aramco, Abu Dhabi National Oil Company, and Emirates National Oil Company – arguing that it prevented Kenya from going through a fuel shortage crisis.

“God helped us, and we had the G-to-G plan, which saved us. As I speak to you, some countries do not even have fuel in their petrol stations, but here in Kenya, we do,” Ruto said, highlighting that the arrangement ensured the country had enough fuel even as others suffered from a lack of supply. 

Under the G-to-G deal, which was extended by 24 months in April 2025 and will run into 2028, Kenya imports fuel on a 180‑day credit arrangement, eliminating the monthly scramble for half a billion dollars in spot-market forex.  Freight and premium costs dropped 11 percent to $78 per metric tonne for diesel, 7 percent to $84 for gasoline, and 13 percent to $97 for jet fuel following the renegotiation. 

However, the deal has not been without controversy. The opposition has accused the government of shielding private interests under the guise of the framework, claiming that handpicked oil marketing companies allegedly linked to powerful politicians are benefiting from the arrangement.  Central to their demands is the cancellation of the G-to-G framework. 

The Economic Ripple: Inflation, Transport, and Household Strain

The fuel price hike comes at a time when Kenya’s annual consumer price inflation was already at 4.1 per cent in April 2025, up from 3.6 per cent in March, marking the highest increase since September 2024.  The price increase was primarily driven by a rise in items in the Divisions of Food and Non-Alcoholic Beverages (7.1%); Transport (2.3%) and Housing, Water, Electricity, Gas and other fuels (0.8%). 

The transport sector saw a 0.5 percent rise, which, according to the KNBS report, was mainly attributed to higher country bus fares during the Easter holiday season.  Kenyans have already started feeling the pinch of the rise in fuel costs as matatu owners announced an increase in bus fares. The Kenya Transporters Association Ltd (KTA) explained that fuel constitutes 55 per cent of total operating costs and advised its members to urgently review their cost structures to reflect the new fuel pricing realities. 

Economists warn that the hike will have a cascading effect on the prices of essential goods and services. Embakasi East Member of Parliament Babu Owino cautioned that the rising cost of fuel will drive up the cost of electricity, given the reliance on fuel in power generation, and will inevitably lead to a higher cost of living as businesses pass the burden to consumers. 

“Increasing fuel costs will push up electricity prices, which will negatively impact production. Manufacturers will incur higher costs, and this will be reflected in the prices of basic goods,” he said. 

Political Firestorm: Opposition Threatens Mass Action

The political temperature has risen sharply in response to the fuel price hike. The United Opposition, led by former deputy president Rigathi Gachagua, has demanded a special National Assembly sitting within seven days to address what it terms as urgent national concerns, including the cancellation of the G-to-G framework. 

Gachagua accused President Ruto of orchestrating a plot to earn him KSh5 per litre in the latest fuel hike, claiming that “following the April 14, 2026, price adjustment, Mr William Ruto will earn a profit of Kenya Shillings 5 per every litre consumed by the people of Kenya.”  The opposition has also called for the immediate resignation and prosecution of Energy Cabinet Secretary Opiyo Wandayi and Trade Cabinet Secretary Lee Kinyanjui over what it termed a “fuel scandal that has pushed pump prices to historic highs.” 

The coalition further urged the suspension of the road maintenance levy, the affordable housing levy, and a halt to increased NSSF deductions, arguing that the taxes had worsened the cost-of-living crisis triggered by the latest fuel price hike. 

In response, the United Democratic Alliance (UDA) defended the recent increase in fuel prices, saying the government had no choice but to do so. UDA Secretary General Hassan Omar dismissed calls for mass action, saying such protests were misguided because fuel pricing is largely influenced by global market forces, not local policy failures. 

“He’s asking for mass action over an international fuel crisis. He should be calling for mass action against Trump and Netanyahu. Those are the people that created this crisis,” Omar said, adding that the opposition’s call was “outrageous, naive and anarchist thinking.” 

Looking Ahead: Will the G-to-G Deal Hold?

As the Iran war enters its fourth week and the Strait of Hormuz remains effectively blocked, Kenya’s G2G fuel deal is being stress‑tested like never before. The contract’s core pricing clause – which floats on S&P Global Platts benchmarks at or near the loading date – has become its Achilles’ heel. The “pre‑negotiated” element is limited to the supplier margin and freight, useful in calm markets, but useless when the entire benchmark curve is on fire. 

An ADNOC refinery supplying Kenya has already invoked force majeure and shut down. One recent cargo arrived with only 60 million litres instead of the contracted 85 million due to safety rerouting.  National stocks, reliant on oil marketing companies’ mandatory 15‑21‑day buffers and zero strategic reserve, are projected to run critically low. 

Energy analysts warn that the current crisis exposes three immediate contractual gaps that must be closed: force majeure carve‑outs and replacement tonnage clauses; price‑cap or hybrid‑index mechanisms; and strategic reserve requirements. “The G2G locks Kenya into paying war‑inflated Platts prices six months later while the 180‑day credit merely delays the forex pain, not the pump‑price pain,” Kilonzo noted. “Consumers will feel the next round of increases within weeks as the landed cost feeds through EPRA’s monthly review.” 

Despite the challenges, President Ruto remains defiant. “I want to assure you that the Government of Kenya will do everything possible. In some countries, as I speak to you, there is no fuel at their pumps, but here in Kenya we have sufficient supply,” he argued. 

But for millions of Kenyans already struggling to make ends meet, the record fuel hike is yet another blow to their household budgets. As transport fares rise and the cost of basic goods edges upward, the coming weeks will test not only the resilience of the economy but also the patience of a weary populace.

The Bottom Line