After President William Ruto signed into law the controversial Finance Bill on 26 June, which increased taxes on fuel from 8% to 16%, the Energy and Petroleum Regulatory Authority said it had increased the price of petrol by Sh13.49 (.10) and diesel by Sh12.39 (.09).
“EPRA has recalculated the maximum pump prices that will be in force from 1 July, taking into account VAT at 16%,” the body said in a statement.
Pursuant to the Finance Act, 2023, VAT on Super Petrol, Diesel & Kerosene has been revised from 8% to 16% effective 1st July 2023. Accordingly, @EPRA_Ke has recalculated the maximum pump prices that will be in force from 1st to 14th July 2023 taking into account VAT at 16%.^DC pic.twitter.com/quXzqXdukt
— Energy and Petroleum Regulatory Authority (@EPRA_Ke) June 30, 2023
Currently, the new prices are Sh194.68 for a litre of petrol, while diesel retails at 179.67, the highest in Kenyan history, despite the High Court ruling that the new law on increased taxes stands suspended until it is heard and determined.
Public transport owners are not taking the increase lightly, with an increase of fares between Sh10 to Sh30 in Nairobi, the capital, and between Sh100 to Sh200 for matatus making long-distance travel in the countryside.
“The sharp increase in fuel costs has forced us to reevaluate our pricing structure,” says Albert Karakacha, Matatu Owners Association chairman, urging the government to subsidise fuel services for public service vehicles to alleviate the burden on both matatu operators and passengers.
Customers feel the pinch
Last Wednesday, public transport was disrupted across the country after matatu drivers went on strike, leaving passengers stranded and bus parks deserted, protesting over increased fuel prices.
Josiah Mulama, a matatu driver who usually ferries passengers from Nairobi to Kisumu in Western Kenya, participated in the strike. He tells The Africa Report that an increase in fuel has led to losses.
“We are suffering, it’s like we are working only to pay for fuel, this is unfair,” he says. Mulama sympathises with passengers, who he says carry a heavy burden.
”Our customers should not blame us, but Ruto’s government for this misfortune,” he adds.
Raila moving via matatu
George Maina, a resident of Mwiki, northeast of Nairobi, tells The Africa Report that during off-peak hours, he used to pay Sh50 to the Central Business District, but he now pays Sh60.
“It’s not easy for me, if things don’t change, I will be forced to walk on foot to work,” he says.
On 10 July, opposition leader Raila Odinga boarded a matatu from Ngong to Nairobi City Centre, to get a first-hand experience and listen to Kenyans who complained of increased fares.
I had a meeting with a team of ODM ladies in Nairobi CBD so I caught a matatu and alighted at Ambassador. I thank them for the invitation.
Nikiwa kwa mathree tumechapiana story na wasee wameniambia vile life imekalia Wakenya noma mbaya sana. 1/2 pic.twitter.com/ipxAt6qGPm
— Raila Odinga (@RailaOdinga) July 10, 2023
While in a matatu a passenger asked Raila to pay for his fare. “We used to pay Sh100, but now we are charged Sh150,” he told the opposition leader.
Apart from calling on Kenyans to come out and protest against Ruto’s increase in fuel prices, Raila also wants ordinary Kenyans to punish the current regime by walking to work.
“Let us deny Ruto the fuel tax by limiting consumption of petrol and diesel. One way to do this is to carpool,” he said on 27 June.
Ruto says he needs money to improve the economy and deliver on his promises.
Every time there is a fuel increase, the matatus increase fares, with sporadic changes every year. The matatu sector faces stiff competition from larger old buses that seem to charge less, giving ordinary Kenyans an option due to difficult economic times.
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