The government has extended the application of the 8 per cent Value Added Tax (VAT) on petroleum products for another three months until October 14, 2026, while announcing a KSh945 million subsidy from the Petroleum Development Levy (PDL) to maintain current fuel prices.
Speaking during a press briefing in Nairobi on Tuesday, Energy and Petroleum Cabinet Secretary Opiyo Wandayi said the measures are intended to cushion consumers and businesses from rising global oil prices triggered by renewed tensions in the Middle East.
Wandayi assured Kenyans that despite disruptions in international shipping caused by military escalation around the Strait of Hormuz, the country's fuel supply remains stable and sufficient.
"Kenya's fuel supply has held firm throughout. Every scheduled cargo has arrived and been offloaded on time, and fuel has remained available at the pump across the country," he said.
The CS attributed the stability to Kenya's government-to-government (G2G) fuel import arrangement, saying it has enabled the country to source petroleum cargoes from a wider range of regions while maintaining fixed freight and premium costs.
According to Wandayi, the arrangement has shielded Kenyan consumers from the volatility affecting countries that rely on spot market purchases, where freight and insurance costs have risen sharply following disruptions in global shipping routes.
He acknowledged that international benchmark prices have begun increasing again as instability in the Middle East persists, warning that global market pressures are likely to influence future fuel pricing cycles.
However, he said the government remains committed to minimizing the impact on consumers.
"As part of the government's commitment to cushioning households and businesses from international market volatility, and in consultation with the National Treasury, we have extended the application period for the 8 per cent VAT on petroleum products for a further three months until October 14, 2026," Wandayi announced.
He added that the government will inject KSh945 million from the Petroleum Development Levy during the July-August 2026 pricing cycle to sustain the current pump prices.
The Energy CS said the intervention reflects the government's broader strategy of protecting consumers, supporting businesses, and safeguarding the economy from external shocks while ensuring petroleum products remain as affordable as possible.
Wandayi further assured motorists, public transport operators, manufacturers, farmers, investors and other consumers that the country has adequate fuel stocks supported by a resilient import and distribution system.
He noted that investments made in strengthening Kenya's petroleum supply chain have improved the country's ability to withstand global market disruptions and maintain uninterrupted fuel supplies.
The announcement came ahead of the Energy and Petroleum Regulatory Authority's (EPRA) monthly fuel price review, offering reassurance to consumers amid uncertainty in international oil markets.
