The government has bowed to pressure, announcing that fuel prices will not be increased. This is after members of the public and motorists decried the heavy burden brought about by the high fuel prices.
On Thursday, July 29, 2021, Mining and Petroleum Chief Administrative Secretary (CAS) John Musonik told Senate that the ministry would continue drawing from the Petroleum Development Fund so as to cushion members of the public and motorists from high diesel, petrol and kerosene prices.
“From April we have been using the fund. For now, we are going to stabilise the prices as we look at all the other components in the pricing,” the CAS told the Denate Committee on Energy.
The scheme is normally activated whenever global oil prices break the $50 (Ksh5, 486) mark per barrel.
According to Musonik, the subsidy will be drawn from billions of shillings collected from consumers through the petroleum development levy, which was increased from Ksh0.40 to Ksh5.40 per litre in July 2020.
The government raised over Ksh15 billion for the subsidy fund. This has seen Kenyans save Ksh14.59 and Ksh19.54 per litre of diesel and kerosene, respectively, since April, 2021.
Kenyans will also breathe a sigh of relief after they were spared Ksh8.01 per litre on super petrol in the price reviews for April and July. This means the price of petrol remains at Ksh127.14 per litre but would have increased to Ksh130.71 without subsidy.
Global crude oil prices have been on a constant rise as Covid-19 vaccinations have helped ease travel bans.
Crude oil prices rose from $36.34 in June 2020 to $63.35 in June 2021, resulting in a sharp increase in fuel prices.
The increase in fuel prices locally would have piled more pressure on struggling motorists and households, which were greatly affected by the Covid-19 pandemic.