As Kenyans it is not uncommon to hear us complain of many things that we find uncomfortable. I think it’s even more of a human thing and not just Kenyans to point such out.
It therefore comes as no surprise when we discuss the crazy fuel rates that are constantly knocking us off our socks. What makes this case unique from the previous cases of rises in fuel is that not only has the fuel price risen, but the food prices, transportation costs, housing cost, and every other thing that would be considered a basic need. Everything is expensive and that is what is worrying Kenyans.
In today’s article I thought we would discuss some of the probable causes of this rise of fuel rates and help shed some light on it so that people can stop thinking President Uhuru Muigai Kenyatta is responsible for every bad thing that happens in the country.
What Has Caused The Rise In Fuel?
In order for you to understand what I will say next, there some key terms that I will need you to familiarise yourself with first;
- Subsidy – a sum of money granted by the state or a public body to help an industry or business keep the price of a commodity or service low.
- EPRA – Energy and Petroleum Regulatory Authority.
- Crude Oil – a raw natural resource that is extracted from the earth and refined into products such as gasoline, jet fuel, diesel and other petroleum products.
- National Treasury – one of the departments of the government. The Treasury manages national economic policy, prepares the government’s annual budget and manages the government’s finances.
- Petroleum Development Levy (PDL) – basically a law that protects both consumers and investors of petroleum in Kenya from exploitation.
Okay so the Kenyan government partially withdrew a fuel subsidy imposed last year, sending diesel and petrol prices to an all-time high for the first time since around October last year. The weakened subsidy plan pushed the energy regulator to increase diesel and petrol prices by Sh5 a litre to Sh115.60 and Sh134.72 respectively — the highest level in Kenya’s history.
Owing to the Russia-Ukraine war which has triggered a rally in commodities like crude oil and in turn crippled the subsidy scheme. The Treasury will pay marketers an estimated Sh9.75 billion to curb a sharp rise in fuel prices.
Without the subsidy, a litre of super would have increased to Sh155.11 while diesel would have retailed at Sh143.16 per litre of diesel. But the Treasury has struggled to meet the cost of the subsidy due to the sharp rise in fuel prices that followed the Russian invasion of Ukraine, prompting the partial withdrawal.
The State would have required Sh11.7 billion in the month to April 14 and another Sh15 billion to meet the full subsidy, which was introduced in April last year to defuse public anger over the high cost of living. With the fund supporting the subsidy exhausted, the Treasury will struggle to pay the marketers billions of shillings at a time when it’s faced with rising spending pressure from critical items like the August General Election and Covid-19 vaccines.
EPRA Director-General Daniel Kiptoo, last month said that the Kenyan government would utilize the Petroleum Development Levy to cushion consumers from the otherwise high prices. The Levy does in fact cushion consumers from high prices of petroleum but the sharp rally in crude oil prices in recent months has depleted the fund and made it unsustainable, prompting the State to raise the red flag last month.
Maybe understanding this will make you be a bit lenient when it comes to judging the government’s actions in such a time as this, and maybe you finally understand that it’s not H. E. Uhuru Kenyatta’s fault but rather the war and so many other processes involved in a state’s operations. Nevertheless we keep on hoping and praying for a better Kenya, and better leadership come August 9th.
Until then, keep it The Millenial News, and be sure to drop a comment in the comment section down below.
Cheers!
Noanne ❤❤❤
References Source
https://www.citizen.digital/business/fuel-prices-unchanged-for-the-fourth-month-n292431
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