Economist Odhiambo Ramogi Says Fuel Price Hike Was Inevitable

An economist has defended the recent increase in fuel prices, arguing that the adjustment reflects global market realities rather than local policy failures.

Speaking in the wake of the latest review by the Energy and Petroleum Regulatory Authority (EPRA), economist Odhiambo Ramogi said Kenya’s limited fuel reserves and rising global crude prices made the increase unavoidable.

“We have tank capacity for about 1.5bn litres of oil. Half of this is regional reserve tanks. Our reserve capacity is roughly about 800 million litres,” he said.

“This translates to about 21 days reserve. The price hike was inevitable.”

Kenya’s fuel reserve capacity has long been a concern for energy planners, with the country relying heavily on imports to meet domestic demand. Analysts note that limited storage buffers leave the country exposed to global price shocks and supply disruptions.

Ramogi also pointed to the structure of Kenya’s government-to-government (G2G) fuel import arrangement, which currently involves Saudi Arabia.

“Our G2G deal is with Saudi Arabia. Ships from Saudi have been operating from the gulf of Eden, not Hormuz. Which means our price increase would mostly be informed by increase in global demand, not logistics,” he explained.

His remarks come amid heightened global attention on shipping routes in the Middle East, particularly the Strait of Hormuz, a key oil transit corridor often affected by geopolitical tensions.

According to the economist, the recent price adjustments in Kenya are broadly aligned with global trends.

“Global crude prices have risen by 30%, our price has increased by 25%. Its a fair development, politics aside,” he said.

The latest EPRA review saw pump prices of petrol and diesel rise sharply, pushing costs above Ksh200 per litre in major towns, a move expected to have ripple effects across transport, manufacturing and the cost of living.

Following the review, consumers in Nairobi will now pay KSh 206.97 per litre for Super Petrol, KSh 206.84 for Diesel, and Ksh 152.78 for Kerosene. The new prices take effect at midnight and will remain in place for the next 30 days.

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>>> Pain at the Pump as Diesel increases by Ksh 40.30, Petrol by Ksh 28.69 in New EPRA Review