KENYA’S petroleum industry performed better in the first quarter of 2026, compared to same period last year, on the back of stable macroeconomic conditions, rising transport activity and increased household demand.
This, even as oil marketers grappled with stiff competition, narrowing market share margins and mounting pressure to improve operational efficiency.
New Petroleum Institute of East Africa (PIEA) data shows total petroleum products consumption grew by 5.4 per cent to 1.65 million cubic metres (Sh1.7 billion litres) during the first three months of 2026, compared to 1.57 million cubic metres (1.6 billion litres) recorded in the corresponding period last year.
This signals sustained economic activity during the quarter despite a challenging business environment on the back of high taxation and operating costs.
While the effect of the Middle East geopolitical conflicts which began at the end of February did not have a major impact during the quarter ending March, heavy public debt burdens and a widening national budget deficit piled pressure on the Kenyan economy.
Industry analysts attribute the growth to contained inflation, a relatively stable Kenya shilling against the US dollar and lower interest rates, which supported consumer spending and business activity while helping stabilise fuel import costs.
Inflation averaged 4.4 per cent during the quarter, before edging up to 6.7 per cent in May and easing to 6.4 per cent last month, while the Central Bank maintained an accommodative monetary policy, lowering the benchmark lending rate to 8.75 per cent easing access to credit for firms and individuals.
Diesel, widely used in transport, large sale farming , industries and energy sectors, remained the biggest growth driver, with consumption rising 9.9 percent, reflecting increased movement of goods, construction, agricultural activity and commercial transport.
Petrol consumption during the quarter increased nine per cent, pointing to higher private vehicle usage and improved retail demand, while kerosene consumption rose 11 per cent, largely driven by household use.
However, jet fuel demand declined 9.5 per cent while fuel oil consumption fell 10.6 per cent, suggesting softer activity in aviation and heavy industrial sectors.
The report also highlights Kenya’s continued shift towards cleaner energy, with Liquefied Petroleum Gas (LPG) recording one of the fastest growth rates in the sector.
LPG consumption jumped 17.7 per cent to 123,974 metric tonnes, driven by government incentives such as zero-rating LPG and implementation of the National LPG Growth Strategy.
“The trend reinforces Kenya’s transition from biomass and kerosene to cleaner cooking fuels while expanding household access to affordable energy,” PIEA chairman, Solomon Osundwa, noted.
Retail outlets remained the backbone of petroleum consumption, accounting for 53.1 per cent of total domestic fuel sales, underscoring the importance of service station networks in determining market leadership.
Resellers contributed 16.5 per cent of consumption, followed by civil aviation at 13.8 per cent, while commercial enterprises and transport sectors continued to support demand.
Manufacturing, agriculture and construction accounted for relatively smaller shares despite their importance to the broader economy.
Despite the healthy growth in fuel consumption, the competitive landscape among oil marketers has become increasingly intense as companies battle for customers through retail expansion, improved supply reliability and stronger commercial relationships.
The overall market remained dominated by three major players.
Vivo Energy retained its leadership position with a 19.14 per cent share of Kenya’s domestic petroleum sales, followed by Rubis Energy at 14.72 per cent and TotalEnergies with 14.25 per cent.
Meanwhile, industry players want Treasury and Kenya Revenue Authority to refund monies owed in the form of duties and vat for supplies to privileged bodies like the United Nations and Armed forces.
This is in addition to subsidies and advance sales which are still outstanding, and also increased fight against llegal filling of LPG which they say continues to be a menace.
