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

How not to win friends

Regional disputes will limit Nairobi's chances of using leadership roles for influence beyond national borders

In 2021 Kenya holds one of two African seats at the United Nations Security Council, the chair of the African Union Peace and Security Council, and for the...


Secret suit aims at ICC evidence

President Kenyatta is suing Safaricom in the High Court in camera

In perhaps the strongest signal that President Uhuru Kenyatta’s defence team is now preparing for a full-blown trial at The Hague in November, his lead International Criminal Court...


Bye-election fever

Two crucial polls reveal the strategies of the major parties. Politics as ethnic loyalty is the main theme for both

Two bye-elections on 7 March were make-or-break events for two big political leaders: Raila Amolo Odinga of the opposition Coalition for Reform and Democracy and Deputy President William...