NAIROBI, Kenya — Kenyans should brace for another increase in fuel prices beginning July 2026 as the Energy and Petroleum Regulatory Authority (EPRA) moves to implement the final phase of a pricing framework that has significantly expanded oil marketers’ profit margins over the past seven years.
The system—known as the Cost of Service for the Supply of Petroleum Products (COSSOP)—was introduced in 2018 to regulate the energy sector while protecting the profits of Oil Marketing Companies (OMCs).
Since its launch, the margin per litre has steadily grown from Sh4 in 2017 to Sh17 in 2024–25. The final increment under the model is due next year.
The matter came under scrutiny during a Senate Energy Committee session on Thursday, chaired by Siaya Senator Oburu Odinga, where lawmakers questioned the widening fuel margins, even as international crude prices drop.
Rwanda vs Kenya: Senators Question EPRA Over Price Gaps
Senators grilled Energy Cabinet Secretary Opiyo Wandayi and EPRA officials over what they termed “unjustified” increases in pump prices.
Citing regional comparisons, they noted that petrol in Kigali sells at Sh161.80 per litre, despite Rwanda being a landlocked country dependent on imports through Tanzania—whereas in Nairobi, a litre goes for Sh186.31.
“In 2017, the margin stood at Sh4, shared between OMCs and retailers. Now it’s Sh17—split Sh11 and Sh6 respectively,” said Narok Senator Ledama Olekina, the Senate Minority Whip. “This doesn’t reflect operational realities. EPRA must consider the lives of ordinary Kenyans.”
Senators also criticized the government’s failure to cushion consumers amid escalating living costs, accusing EPRA of siding with oil marketers at the public’s expense.
EPRA Defends the Gradual Increases
In response, EPRA’s director of Petroleum and Gas, Edward Kinyua, defended the pricing adjustments, saying they were guided by a 2023 cost-of-service review.
He added that the phased increases were necessary to avoid overwhelming consumers.
“Implementing the full margin increase in one go would have made fuel unaffordable. We phased it in gradually. The worst is behind us,” Kinyua said, adding that the 2026 increase would be minimal.
He also pointed to last year’s rise in the Road Maintenance Levy from Sh18 to Sh25 per litre as a contributing factor to higher pump prices.
Lawmakers Unconvinced
Despite the explanations, lawmakers expressed concern over the growing tax burden and pricing opacity.
Senator Ledama cited data showing that taxes on imported fuel now stand at 101%, questioning the rationale given the stability of the exchange rate between Sh129–131 per dollar since August 2024.
“How can taxes double the cost of fuel when the shilling has been stable?” he asked.
The Senate committee has demanded further clarification from the Ministry of Energy and EPRA, with additional hearings expected in the coming weeks.
What This Means for Kenyans
With the final margin adjustment under COSSOP due in July 2026, fuel prices are expected to rise again—even as millions of Kenyans already grapple with high inflation, job losses, and rising food costs.
The development may further pressure the government to reintroduce subsidies or offer tax relief—moves it has resisted in recent months.
