Treasury switches stance on fuel subsidy, pump prices remain unchanged
President Uhuru Kenyatta has directed nearly Ksh17 billion to the fuel price stabilisation program, marking a turnaround on the government’s initial position to terminate the scheme. Consequently, the present fuel prices will hold until the next revision on August 14.
The Energy and Petroleum Regulatory Authority (EPRA) caused grave disquiet last month when it announced substantial fuel price increases, which had petrol retailing at Kes159.12; diesel at Kes140 and kerosene at Kes127.94.
The Treasury Cabinet Secretary Ukur Yatani further ratcheted anxiety among Kenyans with a hint that the fuel prices could rise at a higher rate post-June because his office was planning to gradually withdraw the subsidies, which attenuated fuel prices due to unsustainability.
With Mr Yatani’s assertion in mind, many Kenyans expected the EPRA to announce higher fuel prices which would have seen a litre of petrol retail for a staggering Kes209.95, with diesel and kerosene recording significant upticks.
Read also: Kenya inflation rate hits five-year high of 7.9 percent on sky-high fuel, food prices
Energy costs are a key plank to high inflation numbers showing up in Kenya’s economics data since it forces prices for all manner of goods and services to move up in equal measure.
Kenyans can now breathe a sigh of relief after the President declared that the state will use Kes16.67 billion to maintain the current fuel prices until just after the General Election on August 9th.
According to the World Bank, Kenya’s fuel subsidy bill is an average of $66 million per month, which the global lender says is putting fiscal pressure on revenue recovery that had gathered momentum following a rebound in the economy last year.
