In response to public outrage over the escalating cost of living, Kenya government has reinstated a small subsidy to stabilize retail fuel prices for the next 30 days in the country.
The Energy and Petroleum Regulatory Authority (EPRA), the country’s energy regulator, announced that oil marketing companies will receive compensation from the Petroleum Development Fund to keep prices in check, according to an Al Jazeera report.
According to the regulator, the maximum retail price of a litre of petrol would remain constant at 194.68 shillings ($1.35) for the next month, shielding consumers from an increase of 7.33 shillings ($0.05).
“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 2023 pricing cycle. Oil Marketing Companies will be compensated from the Petroleum Development Fund,” the statement read in part.
READ ALSO: Tinubu, Ruto call for financially autonomous AU, reject fresh scramble for Africa
President William Ruto, upon taking office in September, removed subsidies on fuel and maize flour that were previously established by his predecessor.
Ruto’s rationale was to prioritize subsidizing production rather than consumption.
The move, he said, also aimed to reduce government expenditures, as the administration grapples with debt repayments and seeks to address concerns about potential defaults.
However, the removal of subsidies, coupled with recent tax hikes, has resulted in higher living expenses and contributed to widespread public protests and demonstrations against the government in recent months.
