By Kennedy Nalyanya
Kenyans are once again grappling with a sharp rise in fuel prices, with the Energy and Petroleum Regulatory Authority (EPRA) announcing a notable hike in pump prices in July 2025. Petrol prices in Nairobi now stand at KSh 202.50 per litre, up from KSh 192.70 in June, while diesel and kerosene have also registered similar increases. This latest surge is more than a local economic issue—it’s a direct consequence of escalating geopolitical tensions in the Middle East that are disrupting global oil markets and supply chains.
Recent conflict in the Strait of Hormuz—a strategic chokepoint through which a significant portion of the world’s oil passes—has forced global shipping lines to reroute, inflating freight costs and triggering oil price volatility. Kenya, which relies entirely on imported refined petroleum, is especially vulnerable to such shocks.
One of the immediate consequences of the conflict has been a sharp increase in freight costs. With shipping lines avoiding the volatile Strait of Hormuz, many vessels have been rerouted through longer, less efficient paths. These detours are not just logistical headaches; they translate directly into higher shipping expenses. Kenyan importers are already paying more to bring goods into the country, and these added costs are inevitably being passed on to consumers.
“This month alone, our container charges went up by over 15%,” said a Mombasa-based logistics operator. “It’s making everything from electronics to essential food items more expensive for the end user.”
Crude oil prices are notoriously sensitive to geopolitical unrest, and this conflict is no exception. While global analysts suggest the long-term impact may be buffered by existing reserves and spare capacity, the short-term price spikes have been significant. These fluctuations are particularly problematic for Kenya, which imports all of its refined petroleum products.
Kenya’s energy pricing structure—based on a weighted average system—means the impact of global price spikes is delayed but inevitable. The July 2025 price hike, for example, reflects crude oil volatility experienced in June due to the Middle East conflict.
“When global oil prices jump, we feel the pinch a few weeks later,” explained an EPRA official. “Even if things stabilize quickly, the delayed nature of our pricing model means consumers still experience the pain at the pump.”
Beyond oil and freight, the conflict has triggered wider supply chain disruptions. The misplacement of shipping containers due to route changes and vessel rescheduling has led to serious congestion at key logistical points, including the Port of Mombasa — Kenya’s main maritime gateway.
This congestion results in more than just delays. Importers are being hit with demurrage charges and additional handling fees, costs that again trickle down to the consumer level. In some cases, perishable goods have spoiled while awaiting clearance, exacerbating losses for businesses and contributing to localized shortages.
While Kenyan authorities and businesses have shown resilience in the face of global shocks, the current scenario highlights a deeper vulnerability in the country’s economic model—its heavy reliance on imports and global trade routes. Diversifying energy sources, investing in local refining capabilities, and improving port efficiency are long-term strategies being discussed, but immediate relief remains elusive.
For now, Kenyans are likely to continue facing higher costs on multiple fronts — from fuel and electricity to basic consumer goods — all stemming from a conflict happening thousands of miles away.
As the world watches the unfolding crisis in the Middle East, its indirect toll on the Kenyan economy serves as a sobering reminder of just how interconnected global markets have become.
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