Transport, Food, and Trade at Risk as Fuel Prices Rise, KNCCI Says

The Kenya National Chamber of Commerce and Industry (KNCCI) has raised concern over rising fuel prices, linking the trend to global oil market disruptions.

In a statement dated April 16, 2026, KNCCI Chief Executive Officer Mr KK Mutai said tensions involving Iran have disrupted global oil supply chains and pushed up crude oil prices.

He added that Kenya, as a net importer of petroleum products, remains highly exposed to such external shocks.

KNCCI also noted a recent downward adjustment in fuel prices after the Energy and Petroleum Regulatory Authority (EPRA) removed the additional 8% VAT.

It welcomed the move and said it has offered some relief to households and businesses already facing high living costs.

“Kenyan businesses cannot absorb another fuel shock of this magnitude without serious consequences for jobs, prices, and economic stability,” KNCCI said.

Fuel Remains Central to Economic Activity

The chamber stressed that fuel drives nearly every sector of the economy. It said transport, manufacturing, agriculture, and logistics all rely heavily on stable fuel prices. Therefore, any sharp increase quickly affects production costs and consumer prices.

KNCCI attributed the price surge to international market disruptions, especially the Middle East conflict.

As a result, petrol landed costs have increased by 41.5%, while diesel landed costs have risen by 68.7%. In addition, global oil prices have climbed by 25% to 40% during the same period.

Also Read: Govt Breaks Silence on Possible Electricity Price Hike After Surge in Fuel Costs

Transport, Manufacturing and Agriculture Under Pressure

The chamber warned that businesses already feel the impact. Transport costs have risen by up to 25%, which has pushed up fares and freight charges.

Meanwhile, logistics firms report higher expenses since fuel accounts for nearly 50% of their costs. In manufacturing and agriculture, production costs have increased by 15% to 30%, which now threatens business stability.

KNCCI further pointed to disruptions in global shipping routes such as the Red Sea and the Suez Canal. These disruptions have increased delivery times and raised transport costs.

At the same time, Kenya’s trade with the Middle East, valued at over KSh 700 billion annually, now faces risks. Key exports such as tea, coffee, horticulture, and meat could suffer reduced market access and lower earnings.

Also Read: COFEK Heads to Court Over ‘Cancer-Linked’ Fuel in Kenya

Call for Structural Reforms

The chamber warned that the crisis could drive up food prices, weaken competitiveness, and slow economic growth if it continues. It also noted that taxes and levies account for nearly 45% of the pump price, which further increases costs for consumers and businesses.

KNCCI therefore called for a full review of fuel taxes and levies. It also urged stronger public-private dialogue and targeted support for sectors most affected by rising fuel costs. In addition, it pushed for long-term reforms to stabilize the energy sector.

“Kenya cannot continue to manage fuel shocks through short-term measures. Structural reforms are now unavoidable,” KNCCI stated.

Finally, the chamber said the private sector stands ready to work with the government to stabilize prices, protect jobs, and strengthen economic competitiveness. It warned that urgent action remains necessary to prevent further economic strain.

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KNCCI CEO, Mr. KK Mutai, highlights economic challenges stemming from rising fuel prices. This emphasizes the impact of global conflicts on Kenya’s economy and calls for structural reforms. This was shared from the chamber’s Nairobi office during a press statement on April 16, 2026. PHOTO/ Kenya Chamber X