Treasury Secretary John Mbadi has revealed that a consensus with fuel distributors on standardized importation and delivery expenses has prevented significant fuel price hikes for Kenyan consumers.
During an appearance on Ramogi TV on May 13, the cabinet secretary noted that this arrangement has been instrumental in maintaining stable local fuel prices amid escalating global rates caused by Middle East tensions.
Without governmental involvement and the accord with fuel importers, the CS warned that domestic fuel costs would have risen to unaffordable levels, he explained.
“Luckily, we established uniform transport charges. Had we not reached this agreement on transport costs, fuel prices would have increased if transportation expenses had risen,” Mbadi indicated.
Despite these measures, the cabinet secretary acknowledged that Kenya relies entirely on imported petroleum products.
He pointed out that the conflict with Iran has interfered with global oil supply networks, particularly with the blockage of the Strait of Hormuz, a vital international oil passage.
“The primary factor influencing fuel price variations is Kenya’s lack of domestic fuel production. Since we depend on imported oil, our fuel prices don’t swing as dramatically,” Mbadi explained.
“Although global fuel prices have doubled, they tend to vary frequently. When international fuel prices increase, we must adjust our prices accordingly in Kenya,” he emphasized.
The government-to-government fuel import system has also alleviated some of the pressure by ensuring consistent oil deliveries to Kenya, according to his assessment.
He further noted that the worldwide rise in fuel expenses has compelled importers to procure fuel from alternative and more remote markets.
Nevertheless, the Treasury Secretary conceded that some fuel distributors are currently experiencing financial losses under the current import system, but maintained that this approach has safeguarded consumers from drastic price surges.
His comments come as Kenyans anticipate the May-June fuel rate adjustment by the Energy and Petroleum Regulatory Authority (EPRA), with fears that the Iran conflict might provoke
Fuel pricing continues to be a major issue for numerous families and enterprises since any escalation directly impacts transportation, electricity, food, and other essential commodity costs throughout the nation.