Fuel prices are expected to remain unchanged in Kenya until mid-September as the government has temporarily reinstated subsidies following months of violent protests, a decision that brought into question President William Ruto’s policies.
On 14 August, the Energy and Petroleum Regulatory Authority (EPRA) announced that the decision to reinstate the fuel subsidy was meant to cushion Kenyans from soaring fuel prices.
The price of a litre of petrol remained at constant at KSh194.68 ($1.35), sparing consumers an anticipated increase of KSh7.33.
After Ruto assumed power in September 2022 he removed the fuel subsidy, saying that his government could not subsidise consumption. He blamed the previous administration for a policy he said was benefiting rich Kenyans and taking a toll on the poor majority.
Overbearing burden
With the enforcement of a new housing tax at the end of August, the government had to look for ways to alleviate the burden on ordinary Kenyans, Nairobi-based economist Johnson Denge tells The Africa Report.
“Ruto wants to gain lost trust from angry Kenyans over the high cost of living,” he says, warning that life would be unbearable for the majority of citizens should the government increase fuel prices and taxes simultaneously.
“[The] majority of Kenyans are economically overburdened, the government now understands the pain,” he adds.
Gilbert Obungu, a taxi driver in Nairobi, says he doesn’t expect the subsidy reinstatement to overshadow the previous fuel-price increases.
The government is playing games with us
“Nothing has changed – I’m still struggling to put fuel in my car. The government is playing games with us,” he says, adding that the frequent increases in petrol prices over the past months have abysmally affected his job.
“I’m forced to look for other jobs to feed my family. Petrol is too expensive for me,” he says.
Backtracking?
Opposition coalition Azimio la Umoja, led by Raila Odinga, has been pressuring Ruto to reintroduce subsidies on fuel and maize flour to lower the cost of living.
“We are telling Ruto to bring back the subsidies so that Kenyans can get a sigh of relief,” said Raila at the time.
Opposition senator Ledama Olekina has laughed off Ruto’s move, saying he is eating his own words after realising that Kenyans are going through difficult economic times.
‘Fuel subsidy returned. Check. A journey of a thousand miles,’ he said on his X handle, comparing it to the theft of some sheep from Uhuru Kenyatta’s farm.
Stolen Northlands sheep, returned, Check!
Fuel subsidy, returned, Check!
A journey of a thousand miles…— Sen. Ledama Olekina (@ledamalekina) August 15, 2023
But while addressing a governors’ conference on 16 August, Ruto dismissed assertions that the move meant that his administration had backtracked on its decision to remove the fuel subsidy.
Ruto explained that what had happened was for his government to compensate oil marketing companies using the newly established Petroleum Development Fund to stabilise fuel prices.
“Let me tell the country that we will not go back to subsidies of any nature that distorts things and causes us unnecessary leakage.”
Understand Africa’s tomorrow… today
We believe that Africa is poorly represented, and badly under-estimated. Beyond the vast opportunity manifest in African markets, we highlight people who make a difference; leaders turning the tide, youth driving change, and an indefatigable business community. That is what we believe will change the continent, and that is what we report on. With hard-hitting investigations, innovative analysis and deep dives into countries and sectors, The Africa Report delivers the insight you need.
