EPRA warns of fuel price pressures after bombing of two vessels

EPRA warns Middle East conflict and attacks on Kenya-bound fuel vessels could drive prices higher. [Courtesy]

Kenya’s latest fuel supply disruptions may have been triggered by the bombing of two vessels carrying fuel destined for the country, as escalating conflict in the Middle East continues to disrupt shipments from the Gulf region.

Energy and Petroleum Regulatory Authority (EPRA) Director General Eng Edward Mwirigi told Parliament that recent attacks on two critical fuel infrastructure assets and vessels disrupted supplies, forcing importers to seek alternative sources at reportedly higher costs.

The latest fuel price review is the first under Mwirigi, who was appointed to the position at the end of last month. He warned that prices could come under further pressure during the winter season, depending on developments in the Middle East, as EPRA continues to monitor the situation.

The fears of increased prices come despite Mwirigi insisting that the Government-to-Government (G-to-G) deal has shielded the country from higher fuel increases.

“We have our international oil companies who have the obligation to supply us, whether they are to source from Europe or the Americas or the Far East, now that their traditional markets have been attacked. We may not predict the future, but going into the winter season, prices during the season go up. We hope that we don't get to a level that is so adverse,” he said.

The DG, who appeared before the National Assembly Committee on Special Funds, however, said the regulator is monitoring the situation in the Middle East and will continue stabilising the situation.

The DG was answering queries from the Committee's Chairperson, Fatuma Mohammed, who said there were reports that the two bombed vessels were supposed to deliver oil in Kenya. She further questioned whether that was the cause behind the recent fuel price hike.

“We were told that there were two vessels that were bombed and it was supposed to be our delivery. Is the public aware that this happened? And is it the reason why the oil prices have gone up? Or is it the war that has been going on?” posed Mohammed.

Mwirigi confirmed that the two bombed vessels were destined for Kenya’s market and though the cargo was not destroyed, they were completely immobilised because they hit the engine.

 “Having hit the vessel, it takes almost 40 days for them to get out because they need bomb experts to check whether those stocks are still within the vessel, or whether there can be an explosion because these are flammable products. So, you can imagine, you plan for two vessels, and even getting those two vessels is a big task. And then they are stocked midway in the ocean and stay there for another 40 days,” he explained.

“You are forced now as a supplier to look for additional cargo elsewhere and these are part of the things that are causing a very high escalation in prices, in the free-on-board cost, which is what we are experiencing,” Mwirigi explained.

Nyatike MP, Tom Odege, wondered whether the President is well advised because he pronounced himself that there would be no more fuel price increases.

He also questioned whether EPRA checks what is affecting Kenya’s neighbouring countries before announcing the prices of petroleum products and whether there are alternatives that the country can consider to cushion the public.

“The President announced to the public that there will not be any more oil rises and that is what the common mwananchi knows but looking at what happened, they are affected. Now, paraffin has gone up by Sh28, which will hit the consumers. So, is it that the president is not well advised when he is talking to the public, or was the pronouncement just his thinking? Why can’t we get other alternatives?" Odege asked.

But the DG said that given Kenya’s pricing methodology, the prices are competitive, even as he stated that prices for neighbouring countries are higher.

“I'm confident to say that whatever we have done is not our wish, but it is circumstances surrounding the supply in the world. For those who have been watching international news, they have been broadcasting how the West has been struggling with high prices to the point that they are now looking at discussing getting products out of places like Russia, which traditionally have not been their preference for supply,” he explained.

The Director-General further noted that the Authority was exploring alternative energy sources, although transitioning from conventional petroleum products would be challenging given their widespread use.

Last week, the President assented to the Tax Laws (Amendment) Bill, 2026, passed by the House on October 14, which seeks to extend the reduction of Value Added Tax (VAT) on petroleum products from 16 per cent to eight per cent for a further 90 days, with provision for an additional 90-day extension by the Cabinet Secretary for the National Treasury, if necessary.

The measure follows the expiry on October 14 of the previous relief period, introduced in April 2026, amid continuing uncertainty in global oil prices linked to the crisis in the Middle East.

The extension is intended to enable EPRA to sustain current fuel prices and avert a sharp increase that could raise transport costs and the prices of essential goods and services.

For households, businesses and transport operators, maintaining the reduced VAT rate is expected to ease cost pressures across the economy.