Since the U.S.-Israel assault on Iran erupted on February 28, African nations have faced surging fuel costs, crippling economies from oil-poor Kenya to resource-rich states. Motorcycle taxi driver Eric Wainaina in Nairobi now covers half the daily distance he did before the war, as diesel prices jumped 24% to $1 per litre, slashing his income by half.
Kenya’s Fuel Crisis: A Microcosm of Africa’s Economic Strain
Kenya’s struggle with soaring energy prices underscores the uneven impact of the Iran war across Africa. The East African nation, which imports nearly all its oil, has seen diesel costs spike by 24% since late February, pushing the price of a litre to approximately $1. This surge has forced businesses to cut operations, with motorcycle taxi drivers like Wainaina reducing their daily routes by half to stay afloat. Wainaina, who supports a family of five, now earns less than half his pre-war income, illustrating the human cost of global energy disruptions.
Government officials, including Kenya’s Ministry of Energy and Petroleum, have warned that the budget deficit could widen further as fuel subsidies balloon. The National Treasury has indicated that the government may seek a $600 million loan from the World Bank to mitigate the economic fallout, a request that has been discussed in preliminary meetings with the bank’s Nairobi office. The crisis has exposed vulnerabilities in Kenya’s energy security, where domestic production accounts for less than 10% of demand, according to the Energy and Petroleum Regulatory Authority (EPRA).
Kenya’s President William Ruto addressed the issue in a May 15 speech, stating, “The war in Iran has created a perfect storm for our economy, and we must act swiftly to protect our most vulnerable citizens.” He announced a task force led by Cabinet Secretary for Energy and Petroleum, Davis Chirchir, to explore alternative fuel sources and negotiate bulk oil purchases with global suppliers. The task force includes representatives from the Ministry of Trade, the Central Bank of Kenya, and private sector energy firms.
Meanwhile, protests have erupted in Nairobi and Mombasa, with truckers and small business owners demanding government intervention. The Kenya National Union of Transport Workers (KNUTW) called for a nationwide strike on May 12, which was temporarily suspended after negotiations with the government. The union’s secretary-general, Moses Kibunja, stated, “We are at a breaking point. Fuel prices are crippling our livelihoods, and the government must act before we have no choice but to shut down the economy.”
Oil-Rich Nations Benefit While Others Drown
The Iran war has created stark winners and losers on the continent. While oil-dependent nations like Nigeria and Angola enjoy windfall revenues from higher crude prices, resource-sparse economies face mounting deficits and subsidy pressures. The African Energy Chamber, in its May 2026 outlook report, cautioned that the continent may struggle to fully capitalize on its vast oil reserves due to geopolitical instability and supply chain disruptions. The report, authored by the chamber’s CEO, NJ Ayuk, highlighted that while Nigeria’s oil production has increased, infrastructure bottlenecks and corruption continue to hinder revenue maximization.
In Nigeria, Africa’s top oil producer, state-owned firms such as the Nigerian National Petroleum Corporation (NNPC) have reported record exports, with crude oil revenues rising by over 30% since February, according to the NNPC’s latest financial disclosures. However, the benefits have yet to trickle down to citizens, as domestic fuel prices remain subsidized but volatile. President Bola Tinubu addressed the National Assembly on May 10, acknowledging the disparity: “We are earning more from oil, but our people are still struggling. We must ensure that these revenues are used to stabilize our economy and improve living standards.”
Meanwhile, in South Africa, where fuel prices have risen by 18% since February, transport costs have pushed inflation to its highest level in a decade, reaching 9.2% in April, according to Statistics South Africa. The South African Revenue Service (SARS) has reported a 20% increase in fuel tax collections, but the government has faced criticism for not passing on the full benefits of higher oil revenues to consumers. Deputy President Paul Mashatile stated during a press briefing, “We are exploring ways to balance the need for revenue with the affordability crisis facing households.”
For more on this story, see US-Iran Nuclear Dispute Escalates at UN Conference.
The contrast between oil exporters and importers has deepened regional tensions. The African Petroleum Producers Association (APPA) has called for an emergency summit to address the economic divide, with Nigerian President Tinubu proposing the creation of a continental oil stabilization fund. However, opposition from non-oil-producing nations, such as Kenya and Ethiopia, has stalled the proposal, citing concerns over dependency on volatile markets.
Global Supply Chains Under Pressure
The Strait of Hormuz blockade, a direct consequence of the Iran conflict, has disrupted maritime trade routes critical to Africa’s economy. Over 40% of the continent’s container traffic passes through the strait, and rising insurance premiums and rerouting costs have increased shipping expenses by up to 30%, according to the International Chamber of Commerce (ICC) Africa. Ports in Durban, South Africa, and Mombasa, Kenya, have seen delays as vessels opt for longer, costlier routes around the Cape of Good Hope.
In South Africa, the National Ports Authority (NPA) reported a 15% decline in container throughput at Durban Port in April, with shipping lines such as Maersk and CMA CGM rerouting vessels to reduce exposure to potential conflicts in the Strait of Hormuz. The NPA’s CEO, Thulani Dlamini, warned that further disruptions could lead to a “cascading effect” on the economy, particularly for manufacturing and agricultural sectors dependent on imported inputs.
For landlocked nations like Zambia and Zimbabwe, the impact is even more severe. Higher fuel costs have driven up food prices, exacerbating food insecurity in regions already grappling with drought. The United Nations World Food Programme (WFP) has flagged a 25% increase in acute malnutrition cases in southern Africa since March, directly linked to soaring transport and production costs. WFP Regional Director for Southern Africa, Lola Castro, stated in a May 14 press release, “The combination of rising fuel prices and climate shocks is pushing millions into hunger. We are scaling up emergency food assistance, but the situation remains critical.”
Zambia’s Ministry of Commerce, Trade, and Industry reported that maize flour prices have risen by 40% in the past two months, forcing bakeries and mills to reduce production. The ministry’s permanent secretary, Felix Mutati, announced emergency measures to import 50,000 metric tons of maize from Brazil and Argentina to stabilize local markets. However, the higher shipping costs have increased the price of imported maize by 25%, further straining government budgets.
The Road Ahead: Loans, Subsidies, and Uncertainty
African governments are scrambling for solutions. Kenya’s potential $600 million World Bank loan is just one example of the continent’s reliance on external financing to offset energy shocks. The World Bank’s Africa director, Hafez Ghanem, confirmed in a May 16 statement that preliminary discussions are underway to assess Kenya’s request, with a focus on ensuring transparency and sustainability in the use of funds. The bank has also emphasized the need for Kenya to reform its fuel subsidy system to avoid long-term fiscal instability.
Meanwhile, regional blocs like the African Union (AU) are pushing for collective action, including the establishment of a continental energy reserve to stabilize prices. AU Commissioner for Infrastructure and Energy, Amani Abou-Zeid, announced during the AU’s May 12 summit in Addis Ababa that member states have agreed to explore the creation of a $5 billion energy reserve fund, financed through contributions from oil-producing nations and international partners. The proposal has received mixed reactions, with some nations advocating for immediate subsidies while others push for long-term energy diversification.
However, long-term solutions remain elusive. The African Development Bank (AfDB) has urged member states to accelerate investments in renewable energy, but progress has been slow due to funding constraints and political instability. In a May 17 report, the AfDB highlighted that only 43% of Africa’s energy needs are met by renewables, with hydropower and solar leading but still insufficient to offset fossil fuel dependence. The bank’s president, Dr. Akinwumi Adesina, stated, “We must treat this crisis as an opportunity to leapfrog into a sustainable energy future, but we need urgent support from the international community to make this happen.”
For now, the immediate focus is on managing the crisis—balancing the need for fuel subsidies with the risk of fiscal collapse. In Nigeria, the NNPC has announced plans to increase domestic refining capacity by 20% within the year, aiming to reduce reliance on imported petroleum products. However, the project faces delays due to funding shortages and technical challenges. Similarly, South Africa’s Department of Mineral Resources and Energy has launched a tender for private sector partnerships to expand renewable energy projects, with a target of adding 3,000 megawatts of solar and wind capacity by 2027.
As the Iran war drags on, Africa’s economic resilience will be tested like never before. The continent’s ability to navigate this storm will depend not only on global energy markets but also on its own capacity to diversify supply chains and reduce dependence on volatile imports. The African Union’s recent call for a “solidarity fund” to support non-oil-producing nations reflects the growing recognition that collective action is essential to mitigate the fallout. However, with political divisions and funding gaps persisting, the road ahead remains uncertain.
