Kenya has adequate fuel reserves to cushion the country in the short term, even as the government considers tax adjustments to shield consumers from global oil market shocks.
Treasury Cabinet Secretary John Mbadi said the country currently has enough stock to sustain demand, easing fears of an immediate fuel crisis.
Fuel Stocks Remain Stable Despite Global Uncertainty
According to the latest update, Kenya holds petrol reserves sufficient for 16 days, diesel for 19 days, and kerosene and jet fuel for up to 49 days.
Mbadi assured that the current pricing cycle, running from March 15 to April 14, is unlikely to be affected by recent geopolitical tensions, as the fuel in circulation was procured before the escalation of conflict in the Middle East.
“The current fuel pricing cycle is not likely to be affected since the product concerned was delivered before the Middle East conflict,” he stated.
Additional shipments expected between March and April are also set to bolster supply and maintain stability in the market.
Government Considers VAT Adjustments on Fuel
The government is now exploring possible tax interventions, including adjustments to value-added tax (VAT) on petroleum products, to cushion Kenyans from a potential spike in pump prices.
Appearing before the National Assembly’s finance committee, Mbadi explained that removing or reducing VAT could significantly lower the cost burden on consumers.
“If diesel prices were to rise sharply, removing VAT could help reduce the increase and stabilize the market,” he noted.
He added that the fuel stabilization framework could also be deployed to absorb part of the price shocks, although the final pricing decisions remain under the mandate of Energy and Petroleum Regulatory Authority.
Global Supply Disruptions Raise Concerns
The government’s caution comes amid growing concerns over global supply disruptions linked to tensions in the Middle East, particularly around key shipping routes such as the Strait of Hormuz.
These disruptions have already increased freight costs and slowed down global exports, factors that could eventually push up the cost of fuel and essential goods in Kenya.
However, Mbadi revealed that Kenya’s suppliers under government-to-government agreements are sourcing fuel from alternative regions such as Europe and India, helping to cushion the country from immediate shocks.
No Immediate Cause for Alarm
Despite the uncertainties, the government has urged Kenyans to remain calm, emphasizing that the fuel supply situation remains stable for now.
Officials say they are closely monitoring global developments and stand ready to implement measures to protect consumers and maintain price stability.
