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Fuel prices in Kenya surged to record highs in recent days after the new government slashed subsidies. This has added to the misery for a population already facing deep economic hardship.
Fuel prices in Kenya surged to record highs in recent days after the new government slashed subsidies. This has added to the misery for a population already facing deep economic hardship.
The price of petrol increased by 20 shillings to 179.30 (about US$1.50) per liter while diesel and kerosene prices are up by 20 and 25 shillings respectively. These measures were announced by the Energy and Petroleum Regulatory Authority (EPRA) recently. The new price regime will remain in force until October 14, which was announced shortly after Kenya’s new President William Ruto assumed office. He vowed to scrap food and fuel subsidies. Kenya is reeling from the global surge in crude oil prices. Last year, it introduced measures to cushion consumers from the high retail prices.
Kenya has, so far, spent 144 billion shillings (US$1.2 billion) — about 86 percent of tourism earnings this year — to subside fuel, according to government figures. While lambasting policies being followed by his predecessor Kenyatta, Ruto said they gobbled up billions of shillings with no impact.
Consumption subsidies, Ruto said, were prone to abuse as they distort markets and create uncertainty, including artificial shortages of the very products being subsidised Under the new prices announced by EPRA, the subsidy for petrol has been removed. The subsidy on diesel and kerosene has been reduced.
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Kenya is the most dynamic economy in East Africa. But many are suffering financial hardships with about a third of the population living in poverty. Prices for basic goods skyrocketed in the wake of the Covid pandemic and the war in Ukraine. Unemployment remains a major problem, particularly among the young. Inflation vaulted to a 65-month high of 8.5 percent in August, while the currency is at record lows at around 120 shillings against the dollar.
