This evaluative case study examined the effects of re-regulation of oil prices on oil marketing companies, oil retailers and consumers within Nairobi City County and determined whether the re-regulation was necessary in the first place. The study reviewed secondary literature, obtained and analysed petroleum oil pump prices for the period 2006 to 2010, interviewed executives of the energy policy and regulatory agencies as well as those of Oil Marketing Companies (OMCs) and oil retailers. The study used stratified sampling techniques to select petroleum fuel retail outlets in key business areas within the City of Nairobi and its environs; and convenience sampling to select key informants. Using the ERC price setting formula, the would-have-been regulated prices of 2006-2010 were generated and compared with the actual prices that prevailed over the same period and their effects on the various market participants were analysed. With the aid of SPSS, a Paired t-Test was used to generate statistics that revealed the differences between actual oil prices and the would-have-been regulated prices. Qualitative data were analysed and described using predetermined and themes that emerged. The study confirmed the achievement of stated policy objectives of keeping prices low, protecting consumers, providing reasonable margins to retailers while levelling those of oil marketing companies. The study also provided insights into policy decision-making viz. diesel prices did not significantly differ, but the actual pump prices of petrol significantly differed from the would-have-been regulated prices, implying there was no need to regulate diesel pump prices. Secondly, this study found that the regulation of pump prices provided predictable pricing, lowered transport costs and provided a level playing ground for industry players. Further, it protected consumers from arbitrary price increases and provided a point of accountability. Price regulation made retailers to take initiatives to grow revenues, increase profits and sustain their operations into the foreseeable future. The conclusion of the study is that the regulation of petrol oil prices was justified but not justified for diesel. Consequently, the study recommends the regulation of oil prices should be made based on individual product, and hence the prices of diesel should be deregulated because it is not justified by the study findings. Relatedly, it is recommended that analytical study should precede any future policy decision on regulation of oil prices. Finally, until the weak legal, regulatory and institutional mechanisms that accentuated oil price regulation are adequately addressed, petrol fuel prices should remain regulated for the foreseeable future.