In a bid to restore stability to retail fuel prices following months of violent protests, the Kenyan government has reintroduced a modest subsidy that will remain in effect for the next 30 days. The Energy and Petroleum Regulatory Authority (EPRA) of the country announced this development, marking a reversal of the government’s previous policy that had sparked public outrage due to rising living costs.
President William Ruto, who assumed office in September, had discontinued fuel and maize flour subsidies initiated by his predecessor. His rationale was to prioritize subsidizing production over consumption, while also curbing government spending to manage debt repayments and avoid potential market speculation about a default.
However, these subsidy cuts, combined with recent tax increases, contributed to heightened living expenses and triggered waves of anti-government protests. To address these concerns, the energy regulator revealed that the maximum retail price of a liter of petrol would remain steady at 194.68 Kenyan shillings ($1.35). The government will absorb an additional 7.33 shillings through a price stabilization fund, cushioning consumers from a potential price hike.
While the EPRA did not provide specific reasoning for the decision, officials from EPRA, the energy ministry, and the finance ministry refrained from immediate comments on the matter. The Kenyan government also extended small subsidies to kerosene and diesel, as outlined by EPRA.
The removal of subsidies by President Ruto had initially led to fuel price spikes, and tensions escalated further in July following the government’s approval of a controversial law that doubled the fuel tax. In response to this law, organized protests emerged and were later suspended after the opposition and President Ruto agreed to dialogue in order to address their differences. This marked the second attempt at such talks within the year.
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