Diesel remained the biggest growth driver. KCB Bank Kenya head of oil and gas Noreen Araka, Energy and Petroleum CS Opiyo Wandayi, PIEA chairman Solomon Osundwa and KCB Kenya corporate banking director Peter Ngeno during the Q2 state of the oil industry report launch by PIEA/ HANDOUT KENYA'S petroleum industry performed better in the first quarter of 2026, compared to same period last year, on the back of stable macroeconomic conditions, rising transport activity and increased household demand.
This, even as oil marketers grappled with stiff competition, narrowing market share margins and mounting pressure to improve operational efficiency. New Petroleum Institute of East Africa (PIEA) data shows total petroleum products consumption grew by 5.4 per cent to 1.65 million cubic metres (Sh1.7 billion litres) during the first three months of 2026, compared to 1.57 million cubic metres (1.6 billion litres) recorded in the corresponding period last year.
This signals sustained economic activity during the quarter despite a challenging business environment on the back of high taxation and operating costs. While the effect of the Middle East geopolitical conflicts which began at the end of February did not have a major impact during the quarter ending March, heavy public debt burdens and a widening national budget deficit piled pressure on the Kenyan economy.
Industry analysts attribute the growth to contained inflation, a relatively stable Kenya shilling against the US dollar and lower interest rates, which supported consumer spending and business activity while helping stabilise fuel import costs. Inflation averaged 4.4 per cent during the quarter, before edging up to 6.7 per cent in May and easing to 6.4 per cent last month, while the Central Bank maintained an accommodative monetary policy, lowering the benchmark lending rate to 8.75 per cent easing access to credit for firms and individuals.
Diesel, widely used in transport, large sale farming, industries and energy sectors, remained the biggest growth driver, with consumption rising 9.9 percent, reflecting increased movement of goods, construction, agricultural activity and commercial transport.
Petrol consumption during the quarter increased nine per cent, pointing to higher private vehicle usage and improved retail demand, while kerosene consumption rose 11 per cent, largely driven by household use. However, jet fuel demand declined 9.5 per cent while fuel oil consumption fell 10.6 per cent, suggesting softer activity in aviation and heavy industrial sectors.