Kenya: Kenya’s energy regulator announces the reinstatement of a minor subsidy aimed at stabilising retail fuel prices for the upcoming 30 days. This marks a change in government policy following a public outcry regarding the high cost of living.
President Mr. William Ruto eliminated fuel and maize flour subsidies in September 2023. The president stated a preference for subsidising production over consumption.
The intention behind this action was also to reduce government expenditure as the administration endeavours to manage debt repayments that have led to the government refuting market speculations of a potential default. However, the reductions in subsidies and recent tax increases have raised living expenses and played a role in triggering violent protests against the government in recent months.
The Energy and Petroleum Regulatory Authority (EPRA) stated that the maximum retail price of a litre (0.26 gallon) of petrol would remain the same at 194.68 shillings ($1.35), shielding consumers from an increase of 7.33 shillings ($0.05), which the government will shoulder through a price stabilisation fund.
According to the EPRA, retail fuel prices are set in the middle of each month. The government also applied small subsidies to kerosene and diesel. Fuel prices surged after Mr. Ruto eliminated the subsidies. They saw another sharp increase in July 2023 following the government’s passage of a controversial law in parliament, which doubled the fuel tax.
The demonstrations triggered by that law were cancelled last month as the opposition and Mr. Ruto reached an agreement to engage in discussions to address their disagreements. This marks the second such attempt this year.
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