NAIROBI, Kenya- The government has extended the application of the 8 per cent Value Added Tax (VAT) on petroleum products for another three months and committed Sh945 million from the Petroleum Development Levy (PDL) to stabilize fuel prices amid renewed volatility in global oil markets.
Energy and Petroleum Cabinet Secretary Opiyo Wandayi announced the measures on Tuesday as he assured Kenyans that the country has adequate fuel stocks despite escalating tensions in the Middle East, which have disrupted commercial shipping through the Strait of Hormuz and pushed international oil prices upward.
The extension means the reduced 8 per cent VAT rate on petroleum products will remain in force until October 14, 2026, providing continued relief to households, businesses and transport operators facing rising global energy costs.
In addition, the government will deploy Sh945 million from the Petroleum Development Levy during the July-August 2026 pricing cycle to cushion consumers and maintain current pump prices.
According to Wandayi, the interventions are part of broader efforts to shield the economy from external shocks while ensuring petroleum products remain as affordable as possible under prevailing international market conditions.
“The Government remains committed to cushioning households and businesses from international market volatility,” the CS said.
The announcement comes as renewed military escalation in the Middle East has triggered attacks on commercial vessels and reduced oil tanker traffic through the Strait of Hormuz, one of the world’s most critical oil shipping routes.
Wandayi, however, assured motorists that the geopolitical tensions have not disrupted Kenya’s petroleum supply chain.
He said fuel remains readily available across the country, supported by adequate national stocks, a resilient import and distribution system and the Government-to-Government (G2G) fuel supply arrangement.
The CS noted that the G2G framework has enabled Kenya to maintain fixed freight and insurance costs even as global shipping charges increase, helping stabilize landed fuel costs and guarantee uninterrupted deliveries.
He added that the arrangement has also allowed suppliers to source cargoes from alternative loading regions outside the Gulf without passing additional costs to Kenyan consumers.
While acknowledging that rising international benchmark prices could influence future fuel pricing cycles, Wandayi said the Ministry of Energy and Petroleum will continue working closely with industry players to safeguard fuel supply and maintain the benefits of the G2G agreement.
He further emphasized that investments made by the government in strengthening Kenya’s petroleum sector have enhanced the country’s resilience against global market disruptions, assuring motorists, manufacturers, farmers, investors and businesses that fuel availability will remain stable despite ongoing uncertainty in international energy markets.