Motorists are grappling with an inconsistent supply of fuel in the wake of smaller cargo deliveries at the Mombasa port and cash-flow woes facing oil marketers.
A spot-check in Nairobi revealed that several retail outlets owned by majors such as Vivo Energy and Rubis Energie Kenya have been grappling with stock-outs over the past week, with diesel being the most affected.
Oil executives say that smaller cargoes, mainly of diesel since last month have forced oil marketers to share smaller volumes of fuel, reducing the number of days the stocks can last before the next shipment.
For example, diesel cargoes of between 85,000 tonnes and 100,000 tonnes are traditionally delivered at the port of Mombasa. But disruptions due to the US-Israel war on Iran have forced the country to ship in products using smaller vessels, some with a capacity as low as 37,000 tonnes.
‘Most of us do not have enough product. We normally receive big vessels for diesel, but the Middle East disruptions in the global market have forced us to get smaller ones. These hitches will persist up to around early next month when hopefully, the big vessels will come,’ said one of the executives.
‘Our cargoes for diesel are traditionally big, like 85,000 tonnes, but now we are getting vessels of 37,000 tonnes. These small vessels cannot meet our needs, and we are in a situation where much of these are going straight to the pump.’
The war, which broke out in February this year, disrupted global fuel supply chains notably through the closure of the critical Strait of Hormuz and attacks on refineries in the Gulf region.
Besides smaller cargoes, a steep subsidy of Sh23.92 and Sh108.10 per litre of diesel and kerosene, respectively, applied in the monthly cycle ending May 14, 2026, means that marketers have to wait longer for the Sh6.2 billion compensation further hurting their cash flows.
Most oil marketers started experiencing supply hitches early last month after a vessel carrying petrol was stranded at the Port of Jebel Ali in Dubai due to Iran’s blockade of the Strait of Hormuz.
The ship carried 60,000 tonnes, and its inability to deliver the product in Mombasa forced Kenya to seek alternatives to plug the gap and avert a crisis.
‘Vivo Energy has been operating at very thin PMS (petrol) stock (hand to mouth). Due to the current supply uncertainty, we have experienced increased uplift from our retail sites, which has made the situation worse,’ Vivo Energy CEO, Peter Murungi, had said in a letter to the Ministry of Energy Petroleum on March 12, 2026.
Another executive said the big companies are now pushing most of the product to their retail outlets and reducing the volumes available for the small independents in the wholesale market.
Additionally, costly fuel means that most of the dealers for the big marketers are getting less volumes for the same amount of money (credit limits). These stocks last fewer days, and delays in getting fresh deliveries trigger the inconsistent supply.
‘Due to the higher prices of the product, big marketers would rather push more product to their retail stations instead of selling in the wholesale market and waiting for the government subsidy,’ said the executive.
Sources in the industry say big oil marketers have shunned small independent firms and pushed much of their product to their retail outlets in a bid to ease the impact of the subsidy.
Small independent firms own most of the retail outlets outside the major cities, and buy their fuel from the oil majors at subsidised wholesale prices.
Several dealers, contracted by oil majors have also been hit, given that the costly fuel translates to reduced volumes based on their credit limits.
‘Most of the majors operate via the dealership model, and these dealers have credit limits. For example, a dealer with a credit limit of Sh10 million worth of fuel will now get less product because the prices have gone up, but the credit limit is unchanged,’ said an executive.
The cost of fuel that was imported into the country last month was significantly high, pushing oil marketers to spend more to get the product. This has been exacerbated by the steep subsidy that the government has yet to pay them.
Average landed cost (price of product and transport costs) of kerosene skyrocketed by 105.15 percent to $1,311.93 (Sh170,655.85) per cubic metre last month, while a similar quantity of diesel jumped by 68.72 percent to $1,073.82 (Sh139,682.50).
The cost of petrol went up by 41.53 percent to $823.87 (Sh107,169) per cubic metre last month, underscoring the impact of the US-Iran war on global markets.
The Middle East conflict has put pressure on Kenya’s fuel importation structures, forcing the government to seek emergency supplies to avert a crisis.
Kenya imports fuel under a government-backed deal with Saudi Aramco Trading Fujairah, Abu Dhabi’s ADNOC Global Trading Ltd, and Emirates National Oil Company Singapore Ltd.
The fuel is imported on a credit period of 180 days. The three oil majors handpicked a number of local oil marketers to ship the fuel on behalf of the country.