Diesel Price Drops by Sh10 as Government Rolls Out Record Fuel Subsidy

Kenya has reduced diesel prices by Sh10 per litre from midnight on Sunday after introducing a record subsidy to lower fuel costs.

In Nairobi, diesel now retails at Sh222.85 per litre, while petrol has fallen slightly to Sh214.03. Kerosene remains unchanged at Sh146.93 per litre. The Energy and Petroleum Regulatory Authority (Epra) confirmed the revised prices, saying that the maximum pump prices for diesel and petrol had been reduced while kerosene prices remained the same. 

Acting Director General Joseph Oketch said the maximum prices of super petrol and diesel had decreased by Sh0.22 and Sh10 per litre respectively. The reduction in diesel prices has been supported by a subsidy of Sh34.07 per litre. 

Without the intervention, consumers would have faced a further increase in fuel costs. Diesel plays a central role in Kenya’s transport and manufacturing sectors, making its price a key factor in business costs and inflation. 

The move follows President William Ruto’s commitment last month to deliver a Sh10 reduction in diesel prices, despite concerns that changes to the fuel import pricing formula could lead to higher costs. The price cut comes as inflation continues to rise. 

Inflation reached 6.7 percent last month, moving closer to the government’s preferred upper limit of 7.5 percent. Policymakers have sought to contain price pressures by lowering diesel costs, which affect transport, production and distribution expenses across the economy.

The subsidy has been introduced despite a slight increase in the landed cost of diesel. In May, the landed cost rose by 0.21 per cent to $1,294.71 per cubic metre. Over the same period, the landed cost of petrol fell by 0.56 percent to $901.16 per cubic metre. The difference highlights the role of subsidies in keeping local fuel prices lower when international costs increase.

Attention is now turning to public transport operators, many of whom increased fares last month after diesel prices reached record levels. The latest reduction is expected to increase pressure on operators to lower fares. Fuel prices remain a sensitive issue following last month’s two-day strike by matatu operators, which was linked to rising operating costs.