A cross-subsidy on kerosene has prevented prices of the commodity from crossing the Sh200-a-litre mark in the monthly pricing cycle to October 14, despite a rise in the cost of refined fuel and shipping charges.
In the latest pricing by the Energy and Petroleum Regulatory Authority (Epra), a litre of diesel, petrol and kerosene will remain unchanged at Sh217.86, Sh214.03 and Sh191.38, respectively, in Nairobi.
Without the cross-subsidy, a litre of kerosene would have increased by Sh13.14 per litre to Sh204.52 and significantly hurt its users, who are the most vulnerable to price shocks.
Landed costs (price of refined product combined with freight and insurance costs) of diesel and kerosene rose last month, setting the stage for costly fuel, while the landed cost of petrol dropped.
The Gazette notice shows that the State took Sh5.77 and Sh1.28 from a litre of diesel and petrol, respectively, to help cushion kerosene users, a model technically known as cross-subsidy.
“In the period under review, the maximum allowed petroleum pump prices for Super Petrol, Diesel and Kerosene remain unchanged,” Joseph Oketch, the acting director-general of Epra, said in the notice.
Energy and Petroleum Regulatory Authority acting director-general Joseph Oketch.
Photo credit: Dennis Onsongo | Nation Media Group
Unchanged pump prices look set to derail hopes of easing inflation, given that fuel costs are key in determining the cost of goods and services in Kenya.
Farmers, public transporters and industries factor the cost of diesel when pricing their goods and services, underscoring why prices of diesel are key in determining the inflation rate.
Inflation marginally rose to 6.6 percent last month from 6.5 percent in July. Last month’s rate is the second highest in more than two and a half years, with the 6.7 percent recorded in May 2026 being the highest in this period.
Diesel posted the biggest rise in landed costs at 11 per cent to $957.05 (Sh124,148.52) per cubic metre last month from $855.59 (Sh111,004.24) in July while kerosene rose 9.71 per cent to $1,003.87 (Sh130,222.01) per cubic metre from $915.01 (Sh118,713.39) in the period.
The landed costs of petrol dropped 7.87 per cent last month to $874.26 (Sh113,409) per cubic metre from $948.92 (Sh123,112.88) in July, signalling relief at the pump for petrol consumers.
But the cross-subsidy denied consumers of petrol and diesel price cuts in the latest review as the State moved to protect users of kerosene, mostly low-income households that use the commodity for cooking and lighting.
Prices of refined fuel have rallied since last week in the wake of the escalating Middle East conflict, with consumers set to take a hit in the prices to be announced next month.
