Kenyans to Dig Deeper Into Their Pockets in January as Government Raises Fuel Prices After Kenya Pipeline

Treasury Cabinet Secretary John Mbadi moved to quell public concerns regarding potential fuel price hikes following the government’s sale of a majority stake in the Kenya Pipeline Company (KPC).

The landmark Initial Public Offering, which opened on January 19, is offering 65 per cent of KPC’s shares to the public at Ksh9 per share. The offer is scheduled to run until February 19 and is projected to raise approximately Ksh106 billion for the state.

Speaking on NTV, CS Mbadi firmly dismissed suggestions that the privatisation would lead to increased costs for petrol, diesel, or kerosene. He attributed this assurance to Kenya’s existing regulatory framework and the government’s retained 35 per cent shareholding, which ensures it remains the single largest shareholder.

“The notion that privatising KPC will automatically raise pump prices is unfounded,” stated Mbadi. “Price control remains the mandate of the Energy and Petroleum Regulatory Authority (EPRA), not the pipeline operator. Our regulatory bodies are structured to prevent such outcomes.”

Mbadi underscored that KPC’s function is strictly limited to the transportation of fuel and that it plays no role in setting retail prices. He further explained that a coalition of agencies, including EPRA, the Competition Authority of Kenya, and the Capital Markets Authority, would maintain strict oversight to ensure compliance with pricing structures.

The Cabinet Secretary clarified that proceeds from the KPC sale and other parastatal divestitures would be directed toward national development, not recurrent expenditure. According to the Treasury’s plan, 90 per cent of the funds will be allocated to the National Infrastructure Fund.

The current pump prices, as set by EPRA in its latest review, stand at Ksh182.52 for Super Petrol, Ksh170.47 for Diesel, and Ksh153.78 for Kerosene. Mbadi affirmed that the privatisation is not intended to disrupt these figures but to enhance the company's efficiency and open its ownership to Kenyan and international investors.

The KPC IPO marks a significant step in the government’s broader privatisation programme and is being conducted as the country’s first fully electronic public offer on the Nairobi Securities Exchange.