Increase in fuel bills anticipated for 2025
In a move that could significantly impact Kenyan consumers, the Energy and Petroleum Regulatory Authority (EPRA) is set to implement the final phase of the Cost of Service Study in Supply of Petroleum Products (COSSOP) in the coming year.
Since its inception in 2018, COSSOP has been designed to cushion oil marketing companies (OMCs) by introducing profit margins between importers and dealers (retailers) in phases. This strategy has led to an increase in profit margins for COSSOP, with the cost under COSSOP increasing from Sh4 in 2018 to an all-time high of Sh17 in 2025.
The second phase of COSSOP, implemented in July 2022, contributed about Sh2.47 per litre (excluding VAT) increase in retail fuel prices, as part of an overall increase of about Sh9 per litre. While the exact increase for the final phase is not yet precisely quantified in publicly available data, trends indicate further increases are likely when the final phase is implemented.
EPRA's adjustments under COSSOP are designed to align retail prices with real supply costs, including logistics, storage, and hauler costs. Given the rising global oil prices and cost pressures, the final phase of COSSOP may add a comparable or slightly higher increase.
An Instagram post from TV47News suggests fuel prices are expected to increase starting July 2026, but no specific amount has been provided.
As the final phase of COSSOP approaches, consumers are advised to stay informed and prepare for potential fuel price increases. The overall magnitude of the increase likely depends on global oil prices, logistics costs, and currency fluctuations at that time.
Meanwhile, in other news, a petition has been filed seeking to declare the KEMSA CEO Waqo unfit to hold office. This development comes as President Paul Kagame criticized the Kenya Revenue Authority (KRA) over Sh20 million tax debt claims, stating "It Is Evil!" and a lawyer wrote to Mbadi over debt securitization matters.
[1] "COSSOP: What it means for fuel prices in Kenya" - Business Daily Africa [4] "COSSOP: The impact on fuel prices" - Standard Digital [5] "TV47News Instagram Post" - 16th June 2022
- The final phase of the Cost of Service Study in Supply of Petroleum Products (COSSOP) may lead to an increase in fuel prices, due to aligning retail prices with real supply costs, including finance costs associated with global oil purchases.
- As the Kenyan energy sector continues to be influenced by global market forces, such as rising oil prices and currency fluctuations, the upcoming final phase of COSSOP could potentially impact the finance sector through increased consumer expenditure on energy costs.
