Fuel Prices Hit a Historic High as Ruto's Government Removes Subsidy

Fuel prices on Sunday hit a historic high following the removal of a subsidy that had been easing the cost of living for Kenyans.

The price hike will increase the inflation rate as manufacturers will incorporate the increased cost into their final products. The spike comes after Ruto's administration repealed a subsidy that was effective from April 2021. The removal of the subsidy will burden Kenyans, forcing them to tussle with the increased cost of goods and services.

"The subsidy on diesel and kerosene has been removed," said Daniel Kiptoo the Director General of the Energy and Petroleum Regulatory Authority.

A litre of super is retailing at Sh 182.70 and a litre of diesel at Sh 168.40, a price increase of Sh3:40 and Sh6:40 respectively. In April, the inflation rate had reduced to 7.9% down from 9.2 % in March. This signified a better cost of living, however, an inflationary pressure is expected to surface from the new prices announced last midnight. The development comes after months of IMF's insistent arm-twisting on Kenya to scrap the subsidy which President Ruto last year termed as budget-disruptive.

The price increase at the pump is expected to trigger public outrage especially if the crude prices in the global market will not ease in the coming months. This development comes amid the proposal to double Value Added Tax (VAT) to 16%.