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 be...


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 Bill, which set...

READ FOR FREE

German exile

News that Oku Kaunya, a former deputy Commandant in the Administration Police, has gone into exile in Germany will concentrate the minds of the investigators from the International...


Succession not reform

Bold plans to address political conflict and vote-rigging have been sidelined as the battle to succeed President Kibaki heats up

The groundbreaking programme for political reform set out in the new constitution is at risk as members of parliament and party activists position themselves for the presidential s...


From a grateful nation

Not content with being among the world's best-paid politicians, Kenyan lawmakers have ensured that their predecessors are also amply rewarded for their service. On 5 August, after ...