Kenya’s fuel supply remains secure and consumers should not expect sharp increases in pump prices in the coming weeks despite the ongoing conflict in the Middle East, the Energy and Petroleum Regulatory Authority has said.
The regulator explained that the country’s petroleum imports are protected under an existing government-to-government supply arrangement with Saudi Arabia, which continues to guarantee deliveries even as tensions disrupt shipping routes around the Strait of Hormuz.
Addressing energy sector players during a meeting on energy management, EPRA Director General Daniel Kiptoo said the authority is monitoring developments closely and is in constant communication with suppliers to ensure shipments continue without disruption.
“We are following it daily with the suppliers of the country and as you may be aware these are traders in terms of the load ports that could change in the event there is a challenge at one port so then the closure or the challenge of the Strait may not necessarily apply to ourselves…working together with the suppliers we’re looking at different loading ports,” Kiptoo said.
He explained that Kenya’s fuel pricing structure means the current global developments are unlikely to immediately affect local pump prices.
Kiptoo said the current pricing window will end on March 9 and the authority has not yet begun the next review cycle.
He further explained that Kenya uses an M-1 pricing formula where the price adjustments announced in a given month are based on the cost of products delivered during the previous month.
“As you may be aware, we price on an M-1 basis. The product that we are pricing today was delivered into the country between the 9th and the 10th of the preceding month. So, in the events that are currently occurring in the Middle East, we do not anticipate that they will have an impact on this current pricing cycle, but hopefully we will be able to see the impact as we go ahead,” he said.
EPRA said the country has adequate fuel stocks in reserve and several cargo shipments already scheduled to arrive through early April, helping shield the local market from sudden disruptions.
The authority also said price adjustments will continue to be guided by the need to balance consumer interests, government priorities and the stability of the petroleum sector.
According to the regulator, the conflict that began on February 28 involving the United States, Israel and Iran is not expected to interfere with Kenya’s fuel pricing for both March and April.
Kiptoo said suppliers participating in the government supply arrangement have assured the country they will continue fulfilling their contractual obligations despite the evolving global situation.
“Those suppliers have confirmed to us that they will be able to honour their obligations, and this is one of the benefits of entering into an arrangement with state-owned entities and this is one of the key experiences of this transaction,” Kiptoo noted.
Kenya entered the government-to-government fuel import deal in 2023 when the country was experiencing a shortage of dollars and a weakening shilling, which made it difficult for local oil marketing companies to access petroleum products.
The agreement involves Saudi Arabia’s Aramco Trading Fujairah FZE, the United Arab Emirates’ Abu Dhabi National Oil Company, Global Trading Ltd and Singapore’s Emirates National Oil Company Private Limited under master framework agreements aimed at ensuring a steady flow of petroleum products into the country.
Energy Cabinet Secretary Opiyo Wandayi also moved to reassure the public that the country has enough fuel reserves to sustain supply until the end of April.
“We are closely monitoring the fluid situation as it evolves whilst engaging with our G-to-G suppliers for contingency measures,” he said in a statement on Tuesday.
The closure of the Strait of Hormuz by Iran has left several oil and gas shipments stranded across global markets. However, Saudi Arabia has already redirected millions of barrels of crude from Ras Tanura Port to Yanbu Port on the Red Sea coast to keep exports moving.
Kiptoo said Kenya’s long-standing cooperation with national oil companies and strong government partnerships has helped protect the country from the supply disruptions being experienced in other markets.
“We have seen other commercial entities declare force majeure, we have seen other companies walk away from the obligations that they do have but because of the solid relationship that we have, both at bilateral level and also dealing with government national oil companies they are not likely to walk away from those obligations.”
“And this is a commitment and affirmation that we have gotten from our current suppliers, and this is what gives us comfort that going forward we should be okay.”
