# Kenya Inflation Hits 28-Month High as Fuel Prices Surge

**Published:** 2026-05-29T08:04:48.000Z  
**Topic:** Inflation  
**Sentiment:** neutral  
**Publisher:** TrendWatcher — https://www.trendwatcher.in/article/352a3b49-e8a0-4a2a-871e-d444fe8ea83e

Kenya inflation reached 6.7% in May as fuel price hikes linked to the Iran war drive up transport and food costs, squeezing household budgets nationwide.

Kenya’s inflation rate climbed to 6.7% in May, marking its highest level in more than two years as the country grapples with the economic fallout of the U.S.-Israeli war against Iran [1]. The Kenya National Bureau of Statistics reported that the increase, up from 5.6% in April, puts the country near the upper limit of the government’s preferred 2.5% to 7.5% target range [4].

The surge is primarily driven by energy costs, which have rippled through the economy. Transport prices jumped 16.5%, food and non-alcoholic beverages rose 9.4%, and housing, water, electricity, and gas costs increased 3.4% [1]. Together, these categories account for 57% of the inflation basket, leaving households and businesses highly vulnerable to global oil supply disruptions [4].

Kenya’s Energy and Petroleum Regulatory Authority (EPRA) has raised pump prices for two consecutive months to account for the volatility in global markets [2]. Diesel prices reached a record 242.92 shillings per litre, a 23.5% increase, while petrol rose to 214.25 shillings [2]. These hikes follow the disruption of shipping through the Strait of Hormuz, a critical route for global crude exports that has remained largely at a standstill since the conflict began on February 28 [3].

The government continues to provide partial subsidies for diesel and kerosene to mitigate the impact, but petrol is no longer subsidized as authorities attempt to manage mounting public finance pressures [2]. Despite these efforts, the rising cost of living has effectively erased marginal pay increases offered to workers over the past five years [4]. Real wages have dropped from 62,256 shillings in 2020 to 56,566 shillings last year, according to Kenya Bankers Association estimates [4].

The economic strain has triggered strikes among transport operators and intensified public scrutiny over fuel management, including a separate investigation into a disputed, allegedly substandard fuel consignment [1]. Meanwhile, the Central Bank of Kenya faces a narrowing path for monetary policy; it is scheduled to announce its next interest rate decision on June 9, having left rates unchanged in April [4].

With inflation now exceeding the central bank’s July forecast of 6.2%, the primary question is whether the government will be forced to implement further tax relief or expand subsidies to prevent a broader slowdown in economic activity. The persistence of these high energy costs leaves the country’s largest economy in East Africa heavily exposed to a conflict unfolding thousands of miles away.

## Sources
1. Cnbcafrica — [Kenya inflation rises sharply for second month, driven by fuel - CNBC Africa](https://www.cnbcafrica.com/2026/kenya-inflation-rises-sharply-for-second-month-driven-by-fuel)
2. Business Insider — [Kenya fuel prices hit record high as diesel surges amid global oil supply fears | Business Insider Africa](https://africa.businessinsider.com/local/markets/kenya-fuel-prices-hit-record-high-as-diesel-surges-amid-global-oil-supply-fears/djk5w11)
3. BBC — [Kenya fuel prices rise sharply despite reduction in tax due to Iran war](https://www.bbc.com/news/articles/cgrlll7qgdzo)
4. Businessdailyafrica — [Workers’ pain as fuel prices push inflation to 28-month high - Business Daily](https://www.businessdailyafrica.com/bd/economy/workers-pain-as-fuel-prices-push-inflation-to-28-month-high-5478312)

---
Cite as: TrendWatcher, "Kenya Inflation Hits 28-Month High as Fuel Prices Surge", https://www.trendwatcher.in/article/352a3b49-e8a0-4a2a-871e-d444fe8ea83e