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More pain at the pump as fuel prices hit a historic high


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More pain at the pump as fuel prices hit a historic high


TotalEnergies petrol station in Hurlingham, Nairobi. FILE PHOTO | EVANS HABIL | NMG

Fuel prices rose to a historic high on Sunday after the complete removal of a subsidy that had cushioned Kenyans, setting the stage for a spike in the cost of living.

A litre of super is now retailing at Sh182.70 and that of diesel at Sh168.40 in Nairobi, an increase of Sh3:40 and Sh6:40 in the new prices announced last midnight.

The prices, which are the highest since Kenya started regulating pump prices will trigger inflationary pressure as manufacturers and service providers factor in the increased fuel costs.

The spike in prices came after the William Ruto administration removed a subsidy that his predecessor started in April 2021.

“The subsidy on diesel and kerosene has been removed,” Daniel Kiptoo, the Director General of the Energy and Petroleum Regulatory Authority said.

But while removing the subsidy is a relief to the Exchequer, it will pile pressure on homes and consumers who besides paying more at the pump, must grapple with increased costs of services and goods.

Inflation– the measure of the cost of living– had eased to 7.9 percent last month from 9.2 percent in March.

Kenya’s economy relies on diesel notably farmers, manufacturers and public transport.

The increased cost of fuel will lead to inflationary pressure which is likely to trigger public outrage over the high cost of living.

Dr Ruto had last year vowed to scrap the subsidy saying it was distorting the market and budget-disruptive.

The International Monetary Fund had also pressured his administration to remove the subsidy by December last year in a bid to ease the strain on the Exchequer.

The pain at the pump is set to get dire in the coming months if crude prices in the global market do not ease.

A proposal to double the Value Added Tax on petroleum products to 16 percent will further lead to a hike in prices if it is adopted by Parliament by the end of the month.

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