Kenya outlines e-mobility strategy amid Middle East war crisis

Kenya is accelerating a strategic shift towards electric mobility as escalating geopolitical tensions in the Middle East continue to rattle global energy markets and expose vulnerabilities in the country’s fuel-dependent economy.

Appearing before the National Assembly Finance and National Planning Committee, Treasury Cabinet Secretary John Mbadi said the government is already reworking its vehicle acquisition plans, pivoting away from petrol-powered units in favour of electric alternatives.

The move comes at a time when global oil supply chains remain under strain following conflict involving Israel, the United States and Iran.

Initially, the government had planned to procure 2,500 fuel-powered vehicles. However, Mbadi told lawmakers that this approach has been revised, with the Treasury now backing the local assembly of approximately 3,000 electric vehicles as part of a broader economic resilience strategy.

“We have secured a supplier to assemble the electric-powered cars. That will also create jobs for locals,” the CS aid.

The shift is being supported through policy interventions, including proposals under the Tax Laws Amendment Bill aimed at incentivising the uptake of locally assembled electric vehicles.

According to Mbadi, the changing global landscape has made it necessary for Kenya to rethink its reliance on imported petroleum products, particularly as instability in the Middle East continues to disrupt energy flows, trade routes and financial systems.

“This is the route to take, given the rapidly evolving war in the Middle East, which could pose additional risks to global growth through disruptions to energy markets, trade and financing stability,” Mbadi said.

The ongoing crisis traces back to large-scale strikes on Iran on February 28, 2026, by Israel and the United States, triggering retaliatory attacks across several countries hosting US military bases, including Qatar, Bahrain, Jordan, the United Arab Emirates, Kuwait, Oman and Saudi Arabia.

Of particular concern is the Strait of Hormuz, a critical global shipping corridor for oil and liquefied natural gas. Iran’s move to block the strait has significantly disrupted supply chains, amplifying uncertainty in global energy markets.

Mbadi noted that the Middle East accounts for roughly 30 to 35 per cent of global crude oil production and nearly 20 per cent of natural gas output, underscoring the scale of risk posed by the conflict.

“The strikes have affected energy infrastructure and shipping routes, resulting in production and supply disruptions,” he told MPs.

For Kenya and other African economies, the implications are immediate and far-reaching. The region relies heavily on the Middle East for petroleum imports, making it highly susceptible to price volatility and supply interruptions.

“As an open economy, Kenya is exposed to external geopolitical shocks. While the country maintains genuine macro-economic strengths, underlying vulnerabilities limit the scope of policy response,” Mbadi said.

“The conflict presents risks to our economy, potentially affecting key sectors through several channels, including petroleum imports, which account for approximately 20 per cent of Kenya’s import bill.”

Rising fuel costs are already being felt across the economy, with knock-on effects on transport, manufacturing and consumer prices. Mbadi said that global oil benchmarks have shown sharp fluctuations since the onset of the crisis.

Murban crude, for instance, surged from an average of about Ksh8,268 per barrel in February 2026 to a peak of roughly Ksh15,080  before easing to around Ksh12,467 by mid-March. Brent crude has followed a similar trajectory.

Such volatility, he said, directly impacts inflation and economic stability, given the central role fuel plays in production and logistics.

To mitigate the impact on households and businesses, the government is considering additional measures, including a potential review of the value-added tax on petroleum products. Mbadi also revealed plans to tap into the Ksh17 billion fuel stabilisation fund to cushion consumers from further price spikes.

These interventions, he explained, are designed to provide short-term relief while the country transitions towards a more sustainable and less externally exposed energy framework.

The Treasury’s renewed focus on electric mobility signals a longer-term structural adjustment aimed at insulating Kenya’s economy from recurring global oil shocks, while simultaneously promoting industrialisation and job creation through local vehicle assembly.

Source: People Daily