Wandayi predicts lower fuel prices as US-Iran peace deal eases oil market fears

Speaking during the launch of a Last Mile Connectivity project in Dorobo Village, Mosiro Ward, Narok East Constituency, Wandayi said the agreement could pave the way for the reopening of the Strait of Hormuz, a critical maritime route through which a substantial share of Kenya's fuel imports pass.

The Cabinet Secretary said stability in the region would likely lower global oil prices and eventually translate into reduced pump prices in Kenya.

“Kenya's fuel supply chains remain heavily secure with nationwide storage facilities fully stocked through the end of July 2026, mitigating any threat of domestic shortages. We are working with the private sector to ensure petroleum strategic reserves,” said Wandayi.

He assured Kenyans that the government had put in place measures to cushion consumers from global oil market shocks, including a Ksh10 billion subsidy funded through the Petroleum Development Levy and the retention of Value Added Tax on petroleum products at 8 per cent instead of the standard 16 per cent.

According to the CS, the government has also leveraged the Government-to-Government petroleum import arrangement with Gulf oil suppliers to secure favourable fuel supply terms and shield the country from volatility in international spot markets.

His remarks came days after the latest fuel price review by the Energy and Petroleum Regulatory Authority (EPRA), which saw diesel prices drop significantly.

Under the June 15 to July 14, 2026 pricing cycle, diesel prices fell by Ksh10 per litre to retail at Ksh222.86 in Nairobi, while Super Petrol declined marginally by Ksh0.22 per litre to Ksh214.03. Kerosene remained unchanged at Ksh191.38 per litre.

Wandayi attributed the reductions to a combination of government interventions, favourable supply agreements and the relative stability of the Kenyan shilling against the US dollar.

He noted, however, that any major reduction in fuel prices would depend largely on global market dynamics and would not be felt immediately because Kenya’s pricing formula is based on international benchmark prices from the preceding month.

Beyond fuel, the Cabinet Secretary highlighted the government's efforts to expand electricity access through a Ksh64 billion National Electrification Strategy aimed at connecting 2.3 million additional households to the national grid by 2027.

He said more than 10.3 million households are currently connected to electricity out of a total of 15.6 million households nationwide, translating to a national access rate exceeding 75 per cent.

“The Government has intensified efforts to ensure all households in Kenya are connected to electricity by 2030. Electricity is no longer a luxury but a basic necessity that drives modern economies,” he said.

Wandayi added that 1.4 million new electricity connections have been achieved since 2023 under the administration's Bottom-Up Economic Transformation Agenda (BETA).

In Narok County, he said ongoing electrification projects worth Ksh3 billion are targeting an additional 22,000 households under the Last Mile Connectivity Programme.

The projects are expected to connect homes, businesses and public institutions to the national grid, enhancing economic activity and improving service delivery in underserved areas.

The Cabinet Secretary also disclosed that Kenya is exploring plans to establish a regional petroleum refinery along the East African coastline, a move he said could lower fuel costs across the region in the long term.

Wandayi was accompanied by Ledama Ole Kina and Ken Aramat during the event.