President William Ruto's administration slashed the amount spent on fuel subsidies from Ksh19 billion to Ksh4.3 billion in the latest petroleum products review announced by the Energy Petroleum and Regulatory Authority (EPRA) on Wednesday, September 14.
The move saved a whooping Ksh14.7 billion in his first three days in office as the countdown to the head of state's 100 days in office began. During his inaugural speech, Ruto had stated that the country could be forced to spend over Ksh280 billion on fuel subsidies which he argued was unsustainable.
Following the withdrawal, his administration resolved to utilise the monies collected on account of the Petroleum Development Levy to compensate Oil Marketing Companies (OMCs) for the difference in cost from September 15 to October 14.
The withdrawal reduced the burden on Treasury which has been working to pay oil marketers to maintain fuel prices during the retired President Uhuru Kenyatta's tenure.
Before his action which saw fuel prices in the country hit a record high, taxpayers had spent a total of Ksh144 billion, including Ksh60 billion in the past four months to sustain the program.
Sources privy to a night meeting between Ruto and oil marketers stated that the President was keen on lowering the fuel prices which hit a record high.
The marketers demanded to meet Ruto only before holding discussions with other stakeholders. Officials from the Ministry of Petroleum were also locked out of the high-stakes meeting.
Ruto was convinced that fuel prices will rise owing to his directive ordering the withdrawal of fuel subsidies and was also wary of a shortage witnessed under former President Uhuru Kenyatta's tenure.
Defending his move, Kandara Member of Parliament Alice Wahome maintained that Ruto could not entirely withdraw the subsidy programme after Ministry of Energy officials briefed him on the state of fuel in the country.
“I am privy to the report that the President received on the cost of fuel and it was nearly impossible for him to reduce the cost but it will only be a matter of time before the issue is sorted," she stated, defending the high record fuel prices released by EPRA close to midnight on the previous day," she stated.
She thus called on Kenyans to give Ruto time to address the pending issues regarding debts owed to oil marketers and streamline the sector fully.
Despite saving, the price of Super Petrol increased by Ksh20 to a record high of Ksh179.30 per litre, Diesel increased by Ksh25 to Ksh165 while Kerosene increased by Ksh20 to Ksh147.94 in Nairobi.
In Mombasa, a litre of petrol, diesel and kerosene will go for Ksh176.98, Ksh162.76 and Ksh145.69 respectively.
“Taking into account the weighted average cost of imported refined petroleum products and in line with government policy to progressively remove subsidy on petroleum fuels, the changes in the maximum allowed petroleum pump prices in Nairobi are as follows: Super Petrol, Diesel and Kerosene increase by Ksh 20.18 per litre, Ksh 25 per litre and Ksh 20 per litre respectively,” EPRA's statement read in part.
