NAIROBI, Kenya — Kenya is facing a sharp rise in fuel import costs, estimated at Sh25 billion, as the ongoing Iran-linked conflict continues to disrupt global oil supply chains and push energy prices higher.
The pressure stems from sustained volatility in global crude oil markets following disruptions in key shipping routes, including the Strait of Hormuz, a major transit corridor for global oil exports.
According to analysis, the cost impact is already being felt across Kenya’s transport, logistics, and manufacturing sectors, with the fuel bill emerging as one of the most significant external shocks to the economy this year.
The surge in costs comes at a time when households and businesses are already grappling with high inflation and repeated fuel price increases.
Recent reports show that Kenya has been among the most exposed economies due to its heavy reliance on imported petroleum products from the Middle East.
The impact has not been limited to fuel prices alone. Rising transport costs have triggered fare hikes in public service vehicles and increased the cost of basic commodities, deepening pressure on household budgets.
At the same time, disruptions in global supply chains have led to higher shipping and insurance costs, further raising the landed cost of fuel in the country.
Rising global shock
The broader crisis has been described as one of the most severe energy disruptions in recent years, with global oil prices surging past $100 per barrel at peak levels due to supply constraints.
Analysts say the continued instability is linked to geopolitical tensions involving Iran and its adversaries, which have affected key energy infrastructure and trade routes.
Kenya, which imports all its petroleum products, is particularly vulnerable to such external shocks. The country depends heavily on Middle East supply routes, meaning even small disruptions in global oil flows have immediate domestic effects.
Inflation and economic pressure
The rising fuel import bill is expected to feed into broader inflationary pressures. Transport costs, electricity generation expenses, and production inputs are all directly tied to fuel prices.
The situation has also triggered wider concerns across Africa, where several economies have already implemented fuel price hikes in response to global market disruptions.
