Kenya’s government has signaled that diesel prices could fall in the coming days, in a move aimed at easing pressure on businesses struggling with high operating costs.
Energy Cabinet Secretary Opiyo Wandayi said the expected reduction will be reflected in the next monthly fuel review, pointing to improved fuel availability and stabilizing supply conditions.
“We will ensure a further reduction in diesel prices in the next monthly review,” Wandayi said after a meeting with manufacturers. “Diesel is a critical input that powers transport, agriculture, manufacturing and other sectors of the economy.”
The announcement followed talks with industry players, including the Kenya Association of Manufacturers, which has been pressing for lower energy costs to improve competitiveness.
According to the Energy and Petroleum Regulatory Authority Energy and Petroleum Regulatory Authority, diesel remains the country’s most widely used petroleum product, accounting for nearly half of total fuel consumption. Use rose to about 2.9 billion litres in 2025, underscoring how deeply the fuel is tied to transport, farming and industry.
Government officials say supply has been secured into the coming months, easing fears of shortages seen in other markets exposed to global price swings. The State also maintains that recent policy steps, including tax adjustments on fuel, have helped stabilise retail prices.
Still, the fiscal cost of those measures is significant. The Kenya Revenue Authority estimates it lost Sh9.1 billion in revenue between April and May after a temporary reduction in value-added tax on petroleum products.
Manufacturers have welcomed the prospect of cheaper diesel, saying it could help reduce freight and production costs that have remained elevated over the past year. But they also caution that long-term relief will depend on broader reforms in energy pricing, particularly electricity tariffs that remain high compared with regional peers.
Energy discussions during the meeting also touched on industrial power costs. The government recently paused a planned electricity tariff review and introduced a small reduction in the June billing cycle, citing lower fuel costs and improved hydro-power generation.
The anticipated diesel price cut is being viewed as a short-term easing measure in a sector still shaped by global oil volatility. Industry groups say the real test will be whether Kenya can sustain lower energy costs without straining public finances or reversing recent gains in supply stability.
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