Africa-Press – Kenya. Sustained activities in the transport, manufacturing, construction, and agriculture sectors pushed up fuel uptake in the country as total consumption rose 10.7 per cent in 2025, to 6.55 million cubic metres.
The strong performance came amid shifting consumption trends during the year especially in sectors such as aviation and growing commercial activities, including the secondary petroleum products dealership, which expanded.
According to the Q1 2026 state of the oil industry report by the Petroleum Institute of East Africa (PIEA), the increase was up from 5.92 million cubic metres consumed in 2024, reversing a dip recorded the previous year when high pump prices suppressed demand.
“The recovery has been largely driven by improved macroeconomic conditions, including stable inflation averaging 4.07 per cent, a relatively steady shilling at Sh129.29 to the dollar, and GDP growth of about 4.9 per cent,” PIEA notes in its report.
The stable inflation which remained below the Central Bank’s five per cent midpoint for a sustained period, PIEA says, saw stability in consumer prices which helped preserve household purchasing power and supported steady demand for transport fuels.
These factors supported consumer purchasing power, boosted mobility and increased industrial output—key drivers of fuel usage.
Petrol and diesel remained the backbone of Kenya’s petroleum consumption, recording strong growth as economic activity picked up.
Petrol demand rose by 11.4 per cent while diesel increased by 9.6 per cent, reflecting higher vehicle uptake and increased movement of goods and people.
Lower pump prices also played a critical role, with petrol prices easing from about Sh198 per litre to Sh176 during the period, stimulating consumption across households and businesses.
The report notes that transport and logistics sectors were central to this growth, underlining the economy’s reliance on road-based mobility and freight systems.
One of the standout trends in the sector was the sharp rise in fuel oil consumption, which jumped by 65.2 per cent.
This surge was attributed to increased demand from manufacturing industries and the use of fuel oil in power generation as a backup energy source.
This points to a growing role of petroleum in supporting industrial resilience, particularly in the face of power supply uncertainties.
However, the manufacturing sector’s overall share of petroleum consumption slightly declined to 0.95 per cent, suggesting possible efficiency gains, energy substitution, or lingering cost pressures limiting expansion.
Jet fuel consumption also declined by 4.2 per cent, indicating a slower recovery in the aviation sector compared to ground transport.
Industry analysts attribute this to airline cost pressures, route optimisation strategies and uneven recovery in international travel demand.
The aviation segment’s share of petroleum consumption also dipped to 14.2 per cent, reinforcing its slower rebound relative to other sectors.
Kenya Airways chairman Kiprono Kittony said airlines should opt for fuel hedging to manage volatility of jet fuel prices, even as he assured that the national carrier’s operations remain steady.
“We must hedge and we must ensure that we have sufficient products to keep our routines going,” he said.
Kittony who is also the Nairobi Securities Exchange chair called for wealth building through the capital markets.
Meanwhile, Liquefied Petroleum Gas (LPG) or cooking gas continued to be the fastest-growing segment in Kenya’s energy mix, expanding by 14.7 per cent in 2025 to reach 475,943 metric tonnes.
The growth mirrors a similar increase in 2024 and has been driven by government policies such as zero-rating LPG and the implementation of the National LPG Growth Strategy.
The shift to LPG reflects a broader transition by households away from traditional fuels like kerosene and biomass.
Although kerosene consumption posted a temporary increase of 18.9 per cent in 2025, this was largely attributed to thermal power generation rather than household use.
Over the long term, kerosene demand continues to decline due to electrification and cleaner energy adoption.
Retail outlets remained the dominant channel for petroleum consumption, accounting for 50.9 per cent of total demand. However, this share slightly declined from 51.8 per cent in 2024, signaling a gradual shift toward bulk and commercial consumption.
Resellers, on the other hand, recorded notable growth, increasing their share to 19.1 per cent. This trend highlights rising demand from industrial users and the expansion of secondary distribution networks.
The petroleum market remains highly concentrated among a few dominant players, with Vivo Energy Kenya maintaining its lead at 14.7 per cent market share, followed by Rubis Energy and TotalEnergies.
However, the report notes a slight compression in the market share of top firms as smaller and emerging players gradually gain ground, intensifying competition.
Retail network expansion, supply chain efficiency and inland distribution capacity continue to define competitive advantage in the sector.
The outlook for Kenya’s petroleum industry remains closely tied to macroeconomic stability, energy policy direction, and global oil market dynamics.
While demand recovery in 2025 signals resilience, structural shifts—such as the rise of LPG, changing consumption channels, and evolving competition—are reshaping the sector.
“We need to ensure we continue working together to ensure stability and growth in the sector,” PIEA Peter Murungi, said.
