Speculation rife ahead of fuel price announcement

President William Ruto signalled an end to what he termed consumption subsidies, citing that they were unsustainable.

Ruto made the remarks in his inauguration speech, leaving many Kenyans expecting an imminent increase in fuel prices.

The fact that Kenya has spent an average of Sh9 billion on diesel, super fuel, and kerosene subsidies since April of last year underscores the subsidy’s detrimental effects on the ex-chequer.

President William Ruto inauguration President William Ruto inauguration Pulse Live Kenya

"On fuel subsidy alone, the taxpayers have spent a total of Shh144 billion, a whopping Sh60 billion in the last four months. If the subsidy continues to the end of the financial year, it will cost the taxpayer Sh280 billion, equivalent to the entire national government development budget," the president noted.

“Additionally, there was an attempt to subsidise unga [maize flour] in the run-up to the election, a programme that gobbled up Sh7 billion in one month, with no impact," he added.

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Today, new monthly rates for the period ending October 14 will be announced by the Energy and Petroleum Regulatory Authority (EPRA).

Without the subsidy, drivers would have paid historic highs of Sh214.03 per litre of super and Sh206.17 for diesel without the subsidy for the current monthly pricing cycle.

A pump attendant fills the tank of a car at a petrol station in September 4, 2018 in Nairobi as a 16 per cent VAT on petroleum products was decided and fuel distributors refused to collect stocks from depots. (Photo by SIMON MAINA/AFP via Getty Images) Pulse Live Kenya

President Ruto faces a tough balancing act to lower the cost of living and end the fuel subsidy.

Fuel inflation was the primary cause of overall consumer price increases in Kenya over the past year due to higher pump prices.