Kenya Seeks World Bank Emergency Loan to Ease Rising Fuel Prices Amid Iran Conflict

Kenya has officially asked for urgent financial support from the World Bank to help protect the country from rising fuel prices caused by the ongoing conflict in Iran.

The government says the situation in global oil markets has become unstable, leading to higher fuel import costs. This is especially affecting countries like Kenya that depend heavily on imported petroleum products.

Speaking during the IMF-World Bank Spring Meetings in the United States, Central Bank of Kenya Governor Kamau Thugge confirmed that Kenya has requested “significant” emergency funding. However, he did not reveal the exact amount.

He explained that the money will help stabilise fuel supply in the country and prevent further increases in petrol and diesel prices.

Rising global oil prices affecting Kenya

Kenya continues to face pressure from rising global oil prices, which have been pushed up by the ongoing conflict in the Middle East. The situation has made fuel imports more expensive, increasing the cost of living for citizens and businesses.

To manage the impact, the government is working to secure enough fuel stocks while trying to shield consumers from sharp price hikes that could affect the economy.

Emergency funding from World Bank

The financial support requested falls under the World Bank’s rapid response programme, which is designed to provide quick funding during emergencies. These funds are meant to help countries respond to sudden economic shocks such as global conflicts or market disruptions.

Governor Thugge said the emergency loan will also support ongoing talks with the World Bank under a separate budget support programme known as Development Policy Operations. These discussions started last year before tensions in the Middle East escalated further.

Government assures Kenyans

The request for funding comes shortly after President William Ruto assured Kenyans that the government is taking steps to control fuel prices.

Speaking in Kisii on Wednesday, April 15, the President acknowledged the rise in fuel costs but said measures had been put in place to reduce the impact on citizens.

He explained that the increase in fuel prices is mainly caused by the war in the Middle East, which has disrupted global oil supply chains.

Despite the challenges, the government says it is using diplomatic fuel supply arrangements to help stabilise prices and ensure availability across the country.