Government Extends Fuel Tax Relief, Announces KSh945 Million Subsidy Amid Global Oil Market Uncertainty
Energy Cabinet Secretary Opiyo Wandayi speaking to the press during a media briefing on Tuesday July 14, 2026 at KASNEB Towers in Nairobi.
The government has extended tax relief on petroleum products for a further three months and approved a KSh945 million fuel subsidy to cushion consumers from rising global oil prices triggered by renewed tensions in the Middle East.
Speaking during a press briefing in Nairobi, Energy and Petroleum Cabinet Secretary Opiyo Wandayi assured Kenyans that the country has sufficient fuel supplies despite disruptions to global shipping caused by instability in the Middle East.
“As part of the government’s commitment to cushioning households and businesses from international market volatility, the VAT relief on petroleum products has been extended for a further three months until October 14, 2026. Further, the government will deploy a subsidy from the Petroleum Development Levy amounting to KSh945 million to sustain the current fuel price levels,” said Wandayi.
The CS said the government’s intervention is intended to shield households, businesses and the wider economy from rising international oil prices while ensuring petroleum products remain affordable under prevailing global market conditions.
Wandayi said renewed military escalation in the Middle East has disrupted commercial shipping through the Strait of Hormuz, reducing oil tanker traffic and creating uncertainty in international energy markets. Despite the challenges, he said Kenya’s fuel supply has remained stable under the government’s fuel importation arrangement.
“Kenya’s fuel supply has held firm throughout. Every scheduled cargo has arrived and has been offloaded on time, and fuel has remained available at the pump throughout the country. Our foremost objective has been to ensure a steady and uninterrupted supply of petroleum products,” he said.
The Cabinet Secretary said Kenya’s government-to-government fuel importation arrangement has enabled the country to continue sourcing petroleum from a wider range of regions beyond the Gulf, reducing exposure to supply disruptions and protecting consumers from rising freight and insurance costs.
He noted that while international oil prices are expected to remain volatile as geopolitical tensions persist, the government’s fixed freight and premium arrangement continues to cushion consumers from the full impact of global price increases.
Wandayi assured motorists, public transport operators, manufacturers, farmers, investors and other consumers that there is adequate fuel across the country, adding that the government will continue monitoring developments in the global market to safeguard the country’s energy security.
