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Kenya reinstates fuel subsidy temporarily amidst violent protest

Kenya has reinstated a subsidy on petrol that was scrapped 11 months ago by President William Ruto after he termed it as unsustainable.

East Africa’s biggest economy is grappling with high cost of food and fuel and the subsidy measure comes in the wake of tax increases that sparked widespread protests.

In a statement, the energy regulator said the subsidy will be used to compensate oil marketing companies.

It means the prices of petrol will remain unchanged until the next monthly review in mid-September.

Cushion customers’

“In order to cushion customers from the spike in pump prices as a consequence of the increased landed costs, the government has opted to stabilise pump prices for the August-September pricing cycle,” the Energy and Petroleum Regulatory Authority said.

The government last month doubled the value-added tax on fuel to 16% in a law that also introduced a 1.5% housing levy for all employees and raised the top personal income tax rate to 35%. The law is being challenged in court.

In his speech after being sworn in, Ruto said that the subsidy had been costly and prone to abuse, including causing artificial shortages.

This was after the finance ministry said Kenya could run out of funds to subsidise fuel costs if prices kept rising


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