Kenyan Govt Reinstates Fuel Subsidy After Month Of Violent Protest

Kenya’s Energy and Petroleum Regulatory Authority (EPRA) has reinstated the fuel subsidy programme President William Ruto scrapped on September 15, 2022, after his inauguration. 

Upon coming into power, President William Ruto removed fuel and maize flour subsidies put in place by his predecessor, saying he preferred subsidizing production over consumption.

The move was also aimed at cutting government spending as it seeks to get a handle on debt repayments that have forced it to deny market speculation about a possible default.

However, The removal led to increased living costs and violent anti-government protests in recent months.

The Kenyan government has now made a U-turn, saying that it has reinstated subsidy to stabilize retail fuel prices for the next 30 days. 

The EPRA said the Petroleum Development Fund was reinstated to cushion Kenyans from higher fuel costs caused by the doubling of the Value Added Tax (VAT) on petroleum products from 8 to 16 percent. 

The maximum retail price of a liter (0.26gal) of petrol would remain constant at 194.68 shillings ($1.35), shielding consumers from an increase of 7.33 shillings ($0.05), which the government will shoulder through a price stabilization fund.

The regulator did not provide an explanation for the government’s decision.