Why Kenya’s Fuel Prices Remain Higher Than Those of Its Neighbours
On Sunday, April 19, 2024, President William Ruto addressed a congregation at the Karen church to explain the factors driving Kenya’s relatively high fuel costs. His remarks came amid growing public concern after the Energy and Petroleum Regulatory Authority (EPRA) announced new pump prices on April 14, which placed Kenya at the top of the East African fuel price ladder.
Economic classification and price dynamics
President Ruto began by highlighting Kenya’s status as a middle‑income country, contrasting it with the least‑developed economies of Tanzania, Uganda and Rwanda. According to the World Bank’s 2023 classification, Kenya’s gross national income per capita places it firmly in the middle‑income bracket, while its neighbours remain in the low‑income category.
He argued that this distinction leads to “more aggressive price growth” because middle‑income economies typically experience higher demand for energy, stronger industrial activity, and greater fiscal capacity to levy taxes that fund public goods.
“If you want to fairly compare Kenya with others, compare Kenya with other middle‑income countries,” President Ruto stated.
Infrastructure costs and fuel taxation
The president pointed to Kenya’s expansive road network as another cost driver. With roughly 20,000 km of paved roads — more than any other East African state, including Tanzania and Uganda — the government allocates a significant share of fuel tax revenue to road maintenance and expansion.
Fuel taxes, he explained, are earmarked for transport infrastructure, which in turn improves trade flows, mobility and overall connectivity. These investments are intended to strengthen the national economy over the long term, even if they contribute to higher pump prices in the short term.
Recent price adjustments and public reaction
EPRA’s April 14 update raised the price of premium petrol by KSh 28.69 per litre and diesel by KSh 40.30 per litre. The increases prompted criticism from various quarters, notably Kiharu MP Ndindi Nyoro, who spoke out on April 15.
Nyoro cited Kenya’s monthly petrol consumption of roughly 400 million litres and called for a 5 % reduction in value‑added tax (VAT) together with the removal of the KSh 7 petrol levy introduced in 2024. He estimated that such measures could lower the pump price by about KSh 8 per litre.
- Premium petrol increase: KSh 28.69/L (EPRA, 2024)
- Diesel increase: KSh 40.30/L (EPRA, 2024)
- Monthly petrol consumption: ~400 million litres (Nyoro, 2024)
- Proposed VAT cut: 5 % (Nyoro, 2024)
- Proposed repeal of KSh 7 petrol levy (Nyoro, 2024)
Putting the numbers in context
When compared with fuel prices reported in Tanzania, Uganda and Rwanda during the same period, Kenya’s pump prices were consistently higher. For instance, Tuko News reported that premium petrol in Tanzania sold for approximately KSh 150/L, while Uganda and Rwanda hovered around KSh 155/L and KSh 158/L respectively — figures notably below Kenya’s post‑adjustment levels.
These disparities underscore the structural differences President Ruto described: higher fiscal needs for infrastructure, a broader tax base, and a middle‑income economic profile that shapes pricing mechanisms.
Takeaways for consumers and policymakers
President Ruto’s address serves as a reminder that fuel prices are not merely a reflection of global oil markets; they are also shaped by domestic policy choices, infrastructure commitments, and a country’s development stage. While the current prices may strain household budgets, the government argues that the accompanying investments in roads and connectivity are intended to yield long‑term economic benefits.
For consumers seeking relief, proposals such as a modest VAT reduction and the repeal of specific levies remain on the table. Whether such fiscal adjustments will be adopted depends on balancing short‑term affordability with the sustained funding required for Kenya’s ambitious transport agenda.
