Kenya: Fuel Haulers' Pay Hike Among Drivers of Near-Double-Digit Price Surge

Nairobi — A pay increase for fuel haulers is among three key factors driving the latest Sh9 surge in pump prices, Energy and Petroleum Cabinet Secretary Opiyo Wandayi told lawmakers on Monday amid shock over the sudden leap.

Appearing before the National Assembly's Departmental Committee on Energy, Wandayi said the July-August 2025 hike was the result of a Sh5.3 rise in the international landed cost of fuel, a Sh2.5 increase in local logistics and distribution expenses--including transport and storage margins--and a 10-cent variation in forex exchange rates.

The logistics cost surge, he explained, partly stems from the implementation of the second phase of the Cost of Service Study in Supply of Petroleum Products (COSSOP 2023), which factored in inflation-linked adjustments such as higher pay for transporters and increased secondary storage fees.

"The second phase, implemented on July 15, 2025, added Sh2.47 per litre (excluding VAT) to the retail price across all fuel types," Wandayi stated, citing increases in stock financing, wholesale and retail margins, and intra-county transport within a 40-kilometre radius.

He also cited rising global oil prices, which increased by 6.72 per cent for Super Petrol, 9.33 per cent for Diesel, and 8.15 per cent for Kerosene between May and June 2025.

The change, he said, directly contributed to a Sh5.17 per litre rise in the retail price of petrol.

Wandayi dismissed claims that Kenya's Government-to-Government (G-to-G) fuel import deal should shield consumers from such increases, saying fixed freight and premium rates under the deal do not protect pump prices from global market fluctuations.

Average retail fuel prices for the current cycle (July 15-August 14) now stand at Sh186.31 for Super Petrol, Sh171.58 for Diesel, and Sh156.14 for Kerosene in Nairobi.

Lawmakers demanded greater accountability on the use of the Sh25 billion Petroleum Development Levy allocated in this year's budget for price stabilization.

The committee also sought clarity on liabilities tied to the G-to-G arrangement, under which the government has already settled over USD 10.9 billion (Sh1.41 trillion) in letters of credit.

Read the original article on Capital FM.