Kenyan motorists are staring at hiked fuel prices in the next review due to the ongoing Russia’s invasion of Ukraine that entered day 13.
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 retailed at Ksh.129.72 while diesel and kerosene at Ksh.110.60 and 103.54 respectively, according to the Energy and Petroleum Regulatory Authority (EPRA).
However, due to continued war between Russia and Ukraine, the government could be forced to hike fuel prices, with the international benchmark for oil currently retailing at Ksh.11,372.01 a barrel.
The current average crude oil prices being consumed in Kenya is based on Ksh.9,351.39 a barrel and the monthly review set for March 14, 2022, at Ksh.10,487.97 as it jumped to Ksh.15,845.95 a barrel on Monday.
The United States has already hinted at a ban on buying Russian energy, which will lead to a big impact in Kenya from April.
Kenya introduced a fuel subsidy on April 14, 2021, to diffuse simmering public anger over the high cost of basic items.
Through the development levy, the subsidy scheme has been supported by billions of shillings raised from fuel consumers, which was increased from Ksh.0.40 to Ksh.5.40 a litre.
