Jump to navigation

Kenya

Ruto backtracks on fuel price rise

The President has frozen gasoline prices as he tries to balance revenue-saving commitments to the IMF against protests over the cost of living 

President William Ruto has executed a small but significant U-turn by unpicking plans to increase the cost of fuel. The Energy and Petroleum Regulatory Authority (EPRA) announced on 14 August that the maximum retail price of a litre of petrol would be frozen at 194.68 shillings (US$1.35) forgoing the planned increase of KSh7.33 a litre.

The fuel and maize subsidies were ended by Ruto shortly after taking office last September, a move welcomed by the IMF as part of many revenue-saving measures (AC Vol 64 No 15, The street takes on State House).

In July, an appeals court threw out a legal challenge to some provisions in the Ruto government's budget bill which doubled the value-added tax on fuel and introduced a controversial new housing levy (Dispatches, 11/7/23, Court blocks housing levy as new taxes bite). The government is clear that Kenyans will face two years of fiscal austerity as it shoulders the burden of debt repayments that are due to peak in 2024.

The raft of new taxes, of which the higher fuel tax and scrapping of the subsidy were among the most painful measures for low and middle income Kenyans, have been seized upon by Raila Odinga's Azimio la Umoja opposition coalition. Odinga has rallied mass public protests arguing that the government's policies are deepening the cost of living crisis. The fuel price freeze may only be a short-term measure but it is a sign that Ruto listening to the voice from the street despite his parliamentary majority.



Related Articles

The street takes on State House

Bolstered by another billion from the IMF, President Ruto reckons he can face down a militant but uncoordinated opposition

Austerity economics and street protests are dominating William Ruto's first term in the presidency after he rejected restructuring Kenya's debts in favour of two years of fiscal belt-tightening....


DISPATCHES

Court blocks housing levy as new taxes bite

Some of those who voted for William Ruto report buyers' remorse as economic conditions worsen

Kenyans are bracing themselves for two years of budgetary austerity but the scale of the hit to payslips will be delayed after the Supreme Court blocked the Finance...

READ FOR FREE

Raila takes to the pulpit

Former radical firebrand Odinga tries to woo Kikuyu voters in their churches as President Kenyatta focuses on attacking his ambitious deputy

The dismissal of the Building Bridges Initiative (BBI) by the High Court may yet derail veteran opposition leader Raila Odinga's fifth presidential bid but in the meantime, while...


Pressure-cooker polls

Tensions could boil over when two ethnically based coalitions do battle in elections for the national and county governments

Unlike the peaceful polls that Kenya held in March 2013, the August 2017 elections will be characterised, the conventional wisdom has it, by violence at national and county...


Nairobi's nomenklatura

An emerging elite of business people and politicians is jockeying for influence and contracts

The business and political sands have shifted since President Mwai Kibaki took office in January 2003. Some loyal business retainers of the Daniel arap Moi era have been...