The government has promised a reduction in diesel prices in the next three days attributing this to boosted reserves which can take the country to the end of June.
Speaking after a consultative meeting with manufacturers under the Kenya Association of Manufacturers (KAM), Energy Cabinet Secretary Opiyo Wandayi said the reduction will offer relief to businesses grappling with high operating costs.
The announcement follows government assurances that petroleum product supplies have been secured through the end of July despite ongoing volatility in global energy markets.
“The Government will ensure a further reduction in diesel prices in the next monthly review. diesel is a critical input that powers transport, agriculture, manufacturing and other sectors of the economy,” Wandayi said.
According to data from the Energy and Petroleum Regulatory Authority (EPRA), diesel remains Kenya’s most consumed petroleum product, accounting for nearly half of all fuel used in the country.
Consumption rose to almost 2.9 billion litres in 2025, pointing to the extent to which economic activity depends on the fuel.
The pledge comes as businesses continue to face pressure from elevated production and logistics costs, with fuel expenses remaining one of the largest cost drivers across key sectors.
The CS said the country had taken decisive steps to ensure adequate and uninterrupted fuel supplies, shielding consumers and businesses from shortages experienced in some markets.
This came on the back of Manufacturers and the government beginning negotiations on a roadmap to make industrial electricity tariffs more competitive,
This is after growing concerns that high energy costs are eroding the country’s position against regional rivals and undermining export growth.
Consumers in the country, have been bearing the brunt of every increase in diesel prices and the spiral effect ripple through the economy, raising freight charges, factory operating costs, food prices and the cost of delivering goods to market.
Manufacturers welcomed the government’s indication that diesel prices could fall further in the next fuel review, saying lower fuel costs would ease pressure on production and distribution expenses at a time when businesses are grappling with high operating costs.
Petroleum Outlets Association of Kenya chief executive and KEPSA Energy Board vice-chair Martin Njuguna said industry players had received assurances that fuel supplies remain secure and that diesel prices were expected to decline further.
However, uncertainty remains over how much prices can fall and whether the government can sustain fuel-price support if global oil markets become more volatile.
The Kenya Revenue Authority estimates it forewent Sh9.1 billion in tax revenue between April and May following a government-directed reduction in Value Added Tax on petroleum products.
The meeting also opened discussions on a roadmap to lower industrial electricity costs, signalling a possible shift in energy policy aimed at boosting Kenya’s manufacturing competitiveness.
KAM head of sustainability Joyce Njogu, said Kenya’s industrial power costs remain higher than those of some regional competitors despite improvements in electricity reliability.
The government recently suspended a proposed electricity tariff review and announced a reduction of Sh0.2685 per kilowatt-hour in June electricity bills, citing lower fuel costs, reduced foreign exchange adjustment charges and increased hydropower generation.
Energy Cabinet Secretary Opiyo Wandayi said the government’s priority was to ensure affordable, reliable and sustainable energy supplies, while KAM maintained that broader reforms would be necessary to reduce production costs and strengthen Kenya’s position as a regional manufacturing hub.
