Kenyans will have to dig deeper into their pockets due to the high fuel prices starting Thursday as the new government commences the gradual removal of the fuel subsidy.
In the latest monthly review by the Energy and Petroleum Regulatory Authority (EPRA), the price of petrol is up by Sh20.18 to retail at Sh179.30 per litre in Nairobi.
A litre of diesel will retail at Sh165, a Sh25 increase, while kerosene, mostly consumed by low-income households, has increased by Sh20, retailing at Sh147.94 per litre.
EPRA said that although the subsidy for petrol had been removed, a subsidy of Sh20.82/litre and Sh26.25/litre had been retained for diesel and kerosene, respectively, in order to cushion consumers from the high prices.
The prices include the 8 per cent Value Added tax in line with the Finance Act 2018, the Tax Laws (Amendment) Act 2020 and the revised rates for excise duty for inflation as per Legal Notice No.194 of 2020.
New Government Removes Fuel Subsidies Resulting in High Fuel Prices
The record-high fuel prices come at a time when the government and the International Monetary Fund (IMF) have agreed to end the fuel subsidies that have been cushioning consumers.
President William Ruto indicated on Tuesday he will imminently drop the fuel subsidy, setting up Kenyans for higher transportation and production costs.
Dr Ruto said in his inauguration speech that the economy cannot sustain consumption subsidies in the coming months, pointing to a policy shift that may see him leave the prices of food and fuel to be determined by the market forces of supply and demand.