Ugandans, Rwandese and Tanzanians will soon be turning to Kenya for cheap fuel prices against the backdrop of continued war between Russia and Ukraine.
Kenya is currently pricing the lowest a litre of diesel in the whole of East Africa reversing the market structure that had made the country’s fuel the most costly in the region.
According to a report by Business Daily, a litre of the commodity costs Ksh.112.63 on average in Kenya, compared to Ksh.118.44, Ksh139.08 and Ksh.149.91 in three of the six East African Community countries, Tanzania, Uganda and Burundi, respectively.
The change in market structure is linked to Kenya’s implementation of monthly subsidies, which have reduced current diesel prices by Ksh23.29 per litre.
“The big difference is mainly attributed to the subsidy that the government has been using,” said an official at the Energy and Petroleum Regulatory Authority (EPRA) who spoke to BD.
Kenya introduced the subsidy on April 14 last year.
Despite an increase in the cost of shipping refined petroleum, the subsidy has kept pump prices steady for the fourth month in a row.
Seemingly, Kenyan motorists are staring at hiked fuel prices in the next review due to the ongoing Russia’s invasion of Ukraine that entered day 16.
The National Treasury will struggle to pay oil marketers above Ksh.25 billion over the next two months to keep pump prices unchanged.
“The subsidy will be very expensive if the government opts to maintain it in the new review. I doubt if the government will manage,” said Martin Chomba, the chair of Petroleum Outlets Association of Kenya (POAK).
Kenya has for the past three months retained the cost of fuel, offloading the burden off Kenyans who have continued to reel from harsh economic times in the wake of COVID-19.
The price for a liter of petrol was retained at Ksh.129.72 while diesel and kerosene at Ksh.110.60 and 103.54 respectively.
