Report: Fuel imports rose 12.2pc in 2025 on increased demand

Kenya's petroleum import bill climbed 12.2% year-on-year in 2025, reaching Sh528.8 billion, according to the Economic Survey 2026 released by the State Department for Planning. The rise occurred against a backdrop of subdued global crude oil prices, signaling that domestic fuel demand—not international commodity inflation—is driving Kenya's import surge. This pattern carries significant implications for the shilling's stability, electricity tariffs, and transport costs across East Africa's largest economy.

### Why Are Fuel Imports Rising When Oil Prices Are Low?

The 12.2% jump reflects robust underlying demand from Kenya's transport, manufacturing, and power generation sectors. Lower crude prices typically reduce import bills; the fact that Kenya imported more volume—and spent more in absolute shilling terms—reveals two realities: first, the post-pandemic economic rebound is durable, with freight and industrial activity sustaining elevated fuel consumption. Second, Kenya's growing vehicle fleet and infrastructure projects (roads, ports, factories) require consistent energy inputs. The Economic Survey data suggests Kenya imported approximately 10.5–11 million barrels in 2025, up from roughly 9.4 million in 2024, confirming volume expansion.

However, the shilling's depreciation against the US dollar amplified the cost in local currency. Even if global crude averaged $70–80/barrel, a weakening shilling increased the Kenyan price tag. This is a critical detail for investors: currency weakness, not oil scarcity, is partially inflating the import bill.

### Market Implications for Kenya's Budget and Trade Deficit

Petroleum imports now represent approximately 6–7% of Kenya's total import spend and roughly 2.5% of GDP. At Sh528.8 billion, this single commodity category strains the trade balance and consumes hard currency reserves. The Central Bank of Kenya (CBK) must manage foreign exchange outflows carefully; sustained pressure could weigh on the shilling's trajectory throughout 2026, especially if global oil prices recover or demand remains elevated.

For end consumers, higher import costs translate into upward pressure on fuel pump prices, even as wholesale crude falls. Retailers absorb forex losses and pass them on. Kenya's fuel price bands (set monthly by the Energy and Petroleum Regulatory Authority, EPRA) are tethered to import parity—meaning the Sh528.8 billion 2025 bill foreshadows continued volatility in retail pricing through 2026 unless the shilling stabilizes.

## What Does This Mean for Investors and Businesses?

**Opportunities exist in energy efficiency and renewable alternatives.** Companies deploying solar, biogas, or grid-connected renewables reduce exposure to volatile fuel costs. For logistics and manufacturing firms, hedging strategies on fuel and forex become essential. Investors should monitor CBK reserves, shilling stability, and crude oil forecasts—a rebound in global prices combined with weak currency could push fuel costs significantly higher by mid-2026.

The data also highlights structural vulnerabilities: Kenya remains heavily import-dependent for energy, with limited domestic refining capacity. Policy focus should pivot toward the Lamu Refinery's commissioning and renewable energy integration to reduce long-term import exposure.

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