Kenya: How Kenya’s Fuel Prices affect other East African Countries

Just a day after his momentous inauguration, President William Ruto found himself in a tight spot in which he had to make a tough decision. Last Wednesday, Kenya’s Energy Petroleum and Regulatory Authority (EPRA) announced new fuel prices for the period ending October 14.

This announcement deteriorated Kenya’s economic situation further as consumers woke up to a record increase in fuel and electricity prices in the same week that the new President, William Ruto, was sworn in.

The record-high fuel surcharge comes when the government and the International Monetary Fund (IMF) have agreed to end the fuel subsidies in Kenya that have been cushioning citizens.

On Tuesday last week, President William Ruto vowed to withdraw the fuel subsidy that has kept prices stable since July. At his inauguration, the President said he will do away with subsidies on fuel and food, claiming that they’re a massive burden on the exchequer and lead to product shortages.

But, just a day after his inauguration, President Ruto had to choose whether to continue with the costly subsidy that would negatively affect his government’s ability to spend or to betray the seven million Kenyans who voted for him has promised to lower the cost of living immediately.

The abolishment of the fuel subsidy has seen prices surge by about 15% inflicting more pain on households and businesses that were already grappling with the skyrocketing cost of living.

Following the changes that took effect on 13th September, Thursday last week, the new prices of super petrol, mostly used by private motorists, will now cost about 179 shillings ($1.5) a litre, up 1.3 dollars. Diesel, which is used by transporters and industries, will cost around $1.4. A litre of kerosene, mainly used by low-income households for cooking and lighting, will now cost around $1.2.

EPRA had kept fuel retail prices for July and August, with the pump price for super petrol, diesel, and kerosene in Nairobi trading at Ksh159.12 ($1.32), Ksh. 140 ($1.16) and Ksh. 127.94 ($1.06), respectively. Without the subsidy, diesel and kerosene retail prices would be at Ksh. 185.82 ($1.54) per litre and Ksh174.19 ($1.45) per litre, respectively.

Kenyans are not the only ones feeling the pinch in East Africa as inflation continues affecting the global supply chain. Kenya’s fuel prices affect other East African countries, such as Uganda, Tanzania, Ethiopia, and Rwanda, are not spared either.

According to Tanzania’s regulatory agencies, the retail price for a litre of Super petrol is currently at Sh157.41 while they sell diesel at Sh. 173.53. These were fuel prices as of September 12, 2022.

In Uganda, as of September 12, the retail price for a litre of Super petrol was at Sh. 207.79 while a litre of Diesel was retailing at Sh. 197.84. As of August 22, 2022, Rwanda Petrol was retailing at around Sh186.23 and diesel at Sh186.53. In DR Congo, super petrol goes for Sh147.25 and diesel retails for Sh146.69.

The East African political and economic powerhouse inflation is at five-year highs. In June, the World Bank projected Kenya’s GDP would grow by 5.5% in 2022, a moderation following last year’s recovery when the country’s economy grew by 7.5%.

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