Historic Highs for Fuel Prices Loom as Kenyans Brace for Costly Commutes

by | May 16, 2023 | Business, News | 0 comments

Nairobi residents are reeling from the latest increase in fuel prices, as the Energy and Petroleum Regulatory Authority (EPRA) announced a significant hike in retail fuel prices on Sunday. The new prices will impact not only those in Nairobi but also in other major cities such as Kisumu, Nakuru, and Eldoret.

Super petrol will see a 1.9% increase, with the cost per liter rising to Sh182.7. Diesel prices will go up 3.9%, now retailing at Sh168.4 per liter. Kerosene users are hit hardest by the changes, experiencing a 9.4% increase and bringing the price to Sh161.13 per liter. These adjustments are attributed to the removal of subsidies for diesel and kerosene, according to EPRA.

The new prices come as Kenya’s Treasury proposes to double the Value Added Tax (VAT) on fuel from 8% to 16% in the Finance Bill, 2023. If this change is approved, it would cause fuel prices to climb even higher.

This is the first time Kenyans will face these prices under a government-to-government fuel importation initiative between Kenya and the United Arab Emirates (UAE), implemented two months ago to ease a dollar crisis. The program allows oil marketers to purchase fuel products in local currency, while importers receive a six-month credit period before they must pay suppliers in dollars.

Energy Cabinet Secretary Davis Chirchir noted that the government, through EPRA, is prepared to manage and recover any depreciation costs occurring between the time of supply and payment of suppliers, but these costs will ultimately be passed onto consumers at the pump.

With fuel prices already at historic highs, Kenyans are bracing for potentially even steeper costs and the impact this will have on their daily commutes and lives.

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