Reduced Fuel Prices: Behind-the-Scenes Interventions Take Centre Stage

After fuel prices in Kenya hit an all-time high in September, the Energy Petroleum and Regulatory Authority (Epra) has reduced the prices in its monthly review for October 2021.

State House intervention was reportedly required for Epra to reinstate the fuel subsidy resulting in the first fuel price reduction since June. The subsidy which was dropped in September provides for a Ksh6.86 per litre subsidy on Diesel, Ksh6.13 per litre on Petrol and Ksh4.63 on Kerosene.

The authority cut prices by Ksh5 per litre lowering the cost of Super Petrol and Diesel  in Nairobi to Ksh129.72 and Ksh110.60 respectively. The maximum pump prices will be in effect across the country until November 14.

“The maximum allowed petroleum prices in Nairobi for super petrol and diesel decrease by Sh5 per litre while that of kerosene decreases by Sh7.28 per litre,”  Epra noted in its statement.

In Mombasa, it will cost  Ksh127.46 per litre of Petrol, Ksh108.36 for Diesel and Ksh101.29 for Kerosene. In Kisumu, Petrol, Diesel and Kerosene will cost Ksh130.12, Ksh111.3 and Sh104.26 respectively.

The high prices in September had fueled widespread public outrage which became a subject of concern for state officials and intelligence agencies as well as top politicians with one eye on the 2022 Elections.

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Without the return of the subsidy, the fuel prices were expected to go even higher as oil prices hit $83.65 a barrel.

“Despite the increase in landed costs, the applicable pump prices for this cycle have been reduced. The government will utilise the Petroleum Development Levy to cushion consumers from the otherwise high prices,” Epra stated.

Orange Democratic Movement (ODM) leader Raila Odinga and Deputy President William Ruto are among those who chimed in on the matter.

A fortnight ago, Raila who has been working closely with President Uhuru Kenyatta assured supporters that fuel prices would be reduced within a week. On the other hand, Ruto accused corruption cartels embedded in the Ministry of Petroleum of working with oil marketers to drive up costs to the detriment of taxpayers.

The fuel subsidy is drawn from the Petroleum Development Levy which was increased to Ksh5.40 a litre in July last year from Ksh0.40.

It had emerged that The Treasury exhausted Ksh31 billion allocated for the fuel subsidy after Ksh18.1 billion was diverted to the Standard Gauge Railway (SGR) operations under Chinese operators.

The National Assembly’s Finance Committee wanted the Treasury to reinstate the fuel subsidy using the Ksh18.1 billion diverted to the SGR operator.

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