Ruto goes against IMF as he reinstates fuel subsidy in a big u-turn
3 min read
Ruto administration reinstates fuel subsidy to cushion Kenyans against high skyrocketing pump prices
Ruto administration reinstates fuel subsidy to cushion Kenyans against high skyrocketing pump prices.
In a dramatic U-turn, the government restored fuel subsidies on Monday in an effort to protect customers from increasing pump prices in response to the arrival of a cheaper shipment last week that alarmed oil marketers.
The Petroleum Development Fund was reinstated to protect Kenyans from rising fuel prices, the authority observed in its analysis of this month’s pump pricing.
EPRA went on to say that the rising fuel landing costs also made it necessary to reinstate the subsidies, which Ruto had fought against and even charged the previous administration with squandering the money to the advantage of particular oil marketers.
The Energy regulator kept the prices of fuel unchanged in the latest review cycle after reintroducing the subsidies that would have seen pump prices cross the Sh200 mark.
“In order to cushion consumers from the spike in pump prices as a consequence of the increased landed costs, the government has opted to stabilise pump prices for the August-September pricing cycle,” the Energy and Petroleum Regulatory Authority (Epra) said in a statement.
Epra said the oil marketing companies will be compensated from the Petroleum Development Fund.
According to Epra, without its intervention, the prices of petrol would have risen to Sh202.01 a litre, diesel to Sh183.26 a litre and kerosene would have increased to Sh175.22 a litre in Nairobi.
But instead the prices will remain unchanged at Sh194.68 (petrol), Sh179.67 (diesel) and Sh169.48 (kerosene).
Azimio, Kenya Kwanza demands after bipartisan meeting
Parliament warns Kenyans after KEBS importation of 78,000 defective gas cylinders
Kenya signs MoU with UNDP on digital ID development (Maisha Namba) ahead of rollout
US will not influence Ruto to handshake with Raila after Coons visit, Kenya Kwanza
Ruto scrapped fuel subsidy programme after taking over the government claiming it was unsustainable.
Former President Uhuru Kenyatta’s administration initiated the subsidy programme to moderate pump prices, which also influence the prices of essential commodities such as foodstuffs. Kenya, under Uhuru, spent an average of Ksh7.65 billion monthly to subsidise diesel, super and kerosene.
Removal of the subsidies was said to be among the conditions set by the International Monetary Fund (IMF) to grant loans to President William Ruto.
“The authorities intend to continue gradually realigning domestic to global fuel prices in the financial year 2022/23 so as to eliminate the fuel subsidy by October 2022,” the IMF said in the third programme review for Kenya’s Ksh270.2 billion ($2.34 billion) loan package.
“The authorities also plan to complete by end-July 2022 a review of the application of Kenya’s fuel pricing mechanism and constitute a task force to oversee the progressive elimination of the fuel subsidy within the first half of FY2022/23 and to ensure that fuel pricing actions are at all times aligned to the approved budget (new structural benchmark),” IMF added in July this year.
Also read,
Commonwealth election observer group issues an appeal to Kenya over corrupt leaders
Trade CS Kuria proposes the introduction of 25 percent tax on imported clothes, Mitumba
Azimio unconfortable with Ichung’wah role in bipartisan talks
Worldcoin likely to temper with data from Kenyans; Data protection office
Follow us
