Despite diesel prices maintaining stability in the last two months, trading at Ksh197 per litre, the increase witnessed between September 2022 and January 2024 has affected the majority of bus companies.
Diesel prices increased by Ksh57 within the 16 months compelling the companies to downsize their fleets citing diminishing profits.
The government was also accused of creating an unfavourable environment for the once-vibrant industry through increased taxes.
Peter Kimwele, a vehicle dealer for various bus companies in Mombasa told Kenyans.co.ke that a 45-seater bus consumes 320 litres for a return trip from Nairobi to Mombasa.
With diesel retailing at Ksh197, a round trip for one bus only costs a company nearly Ksh63,040.
Kimwele confirmed to Kenyans.co.ke that for a trip from Mombasa to Kisumu, the bus will consume 600 litres of diesel at a price of Ksh118,000.
With January being off-peak travel season, bus companies charge an average of Ksh1,700 from Mombasa to Nairobi meaning for a round trip, the company makes an average of Ksh153,000.
“After paying for fuel, you remain with Ksh89,000 which is subjected to numerous deductions making the business no longer lucrative,” Tom Muange, a long-distance driver told Kenyans.co.ke.
He added that trucks spend over 380 litres on fuel for a similar trip.
The Ksh89,000 is subjected to over five mandatory deductions ranging from insurance coverage to paying crew members.
According to the Kenya Revenue Authority, all bus companies must pay an Advance Tax before January 20, every year or before vehicle ownership transfer.
“Buses and coaches pay Ksh60 per passenger capacity per month subject to a minimum of Ksh2,400 per year of income,” KRA states on Advance Tax for long-distance vehicles.
The vehicle must also be routinely inspected by the National Transport and Safety Authority (NTSA) to make sure it has all the required permits and licences.
According to NTSA, the vehicle must have a valid inspection certificate, insurance cover and a road service licence.
Additionally, the crew must have a valid Public Service Vehicle (PSV) licence and a licence from the Music Copyright Society of Kenya (MCSK).
Bus companies also need a permit from the county governments they operate in.
“In total, you can spend over Ksh400,000 on meeting all requirements and paying the staff. Although some of the payments are annual, they are paid from a collection of money made during the daily trips,” Tom explained why many companies were struggling to stay afloat.
Additionally, due to the reduced number of passengers travelling during the offpeak season, some bus companies are unable to operate at full capacity despite using Ksh63,000 on fuel.
This leads to minimal profits and sometimes losses. To survive, some bus companies turn to operating 11-seater shuttles.
