Skip to main content
September 21, 2018

Subsidies needed to ease the burden on poor Kenyans

A trader dries fish skeleton for sale on a wire mesh ahead of the Presidential election in Kibera slums of Nairobi, Kenya August 6, 2017. /REUTERS
A trader dries fish skeleton for sale on a wire mesh ahead of the Presidential election in Kibera slums of Nairobi, Kenya August 6, 2017. /REUTERS

The increase in fuel prices and taxes will create a ripple effect on consumers and hit low-income earners hardest, an expert has warned.

Consumer Downtown Association executive director Japheth Ogutu said increase in fuel prices will translate to increase in all prices of products and services, transport and meals.

He said people living away from the oil refinery and storage points will incur more charges due to increase in transportation costs of fuel, agricultural produce and processed products.

"People in places like Turkana and remote areas are going to suffer more as transportation charges are transferred to the cost of products," Ogutu said.

He urged the government to subsidise products such as unga, paraffin and milk and baby food. The cheap LPG gas project, for instance, was meant to provide cooking solutions to poor households.

The initiative, rolled out in October last year, is on a pilot phase in Machakos and Kajiado counties. Gas Yetu package comes with a 6kg gas cylinder filled with cooking gas, along with a burner and grill retailing at Sh2,000.

Ogutu said the project needs to be implemented across the country, as charcoal prices have increased due to the ban on cutting trees. Kerosene will also be selling at Sh95 per litre.

The prices of fuel have increased to Sh112 per litre, and the addition of VAT in places like Turkana, Kisumu and Western prices will see it rise to close to Sh140.

Ogutu said the government will be discouraging use of motor vehicles to go to work by most car owners. "Ordinary Kenyans will resort to using public means of transport."

"I call upon Treasury to amend the act in Parliament to strike off or moderate the 16 per cent VAT to reflect the reality in the market."

He said consumers living below Sh300 a day will see their standard of living deteriorate. "The cost of living is already high. The money expected to trickle down to government in last year’s of development has not changed the lives of common Kenyans so far. With the current increase, their lives are going to be even more unbearable," Ogutu said.

On taxes on alcohol and beverages, he said the government should tax moderately, as a reduction in intake of drinks would reduce business revenues.

 

Poll of the day