Fuel subsidy unsustainable

In Summary

• The price of a litre of petrol has jumped from Sh159 to Sh159 after the fuel subsidy ended

• Inevitably price inflation will increase, hurting the wananchi and middle classes

An attendant fuelling a car.
An attendant fuelling a car.
Image: FILE

President Ruto warned in his inauguration speech on Tuesday at Kasarani that he intended to remove the subsidy on the price of fuel.

Yesterday the subsidy ended and the price of a litre of petrol jumped from Sh159 to Sh179, a 12 percent increase.

The fundamental cause of the soaring price of fuel is the Russian invasion of Ukraine in February. The government fuel subsidy only cushioned the blow but did not stop it.

According to Ruto, government has spent Sh144 billion on the fuel subsidy in the last year with Sh75 billion still owed to the oil marketers. If the subsidy had not been removed, Kenya was about to start facing severe fuel shortages.

Moreover, the outgoing government of President Kenyatta had already promised the IMF that it would remove the fuel subsidy by October. 

Ending the fuel subsidy was brutal but necessary. It will raise transport costs and hurt the wananchi and middle classes. But the subsidy was unaffordable and unsustainable.

The fuel subsidy had to go. But President Ruto promised to help the 'hustler' in his election campaign. He has saved on the fuel subsidy but he now needs to find other ways to help the poor people of Kenya.

Quote of the day: "From God we have come and to God we must return."

Omar Mukhtar
The Italian army hanged the Libyan  resistance leader on September 16, 1931

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