Treasury Cabinet Secretary John Mbadi has said fuel prices will remain unchanged until the next review by the Energy and Petroleum Regulatory Authority on June 14, even as the ongoing matatu strike continues to disrupt transport across the country.
Speaking on Monday during an interview, Mbadi said the government is monitoring the situation closely following public outrage over the sharp rise in fuel prices that triggered protests and transport disruptions in several towns.
“The government is monitoring the situation. We have the next review by June 14,” Mbadi said, adding that the state will assess the impact of the current prices before making further decisions.
The latest fuel review pushed diesel and petrol prices to record highs, forcing some matatu operators to increase fares while others withdrew vehicles from the roads in protest, leaving thousands of commuters stranded, especially in Nairobi.
On Monday morning, many passengers were seen waiting for hours at bus stops as transport operations remained paralysed in parts of the city.
Mbadi acknowledged the pressure Kenyans are facing but maintained that the government has already put in place measures to cushion consumers from even steeper increases.
According to the CS, authorities are considering using the Ksh5 billion fuel subsidy kitty to help stabilise prices. He added that if the funds prove insufficient, the government could review Value Added Tax on fuel again.
“We will look at the subsidy kitty of Ksh5 billion and if that is not sufficient, and if it leads to higher prices, then we may consider reducing VAT again,” he said.
Nevertheless, Mbadi pointed out that reducing VAT would compel the government to cut expenditures in other areas since such moves would need consultations within the government.
The Treasury CS also criticized the manner in which the fuel prices are announced, calling on EPRA and the Ministry of Energy to ensure transparency during their upcoming reviews.
He said Kenyans should not be caught by surprise whenever new fuel prices are announced.
“I would personally advise EPRA and the Ministry of Energy to communicate better with Kenyans as we approach June,” Mbadi said.
He went on to explain that the government will continue the negotiations once President William Ruto returns from Azerbaijan to look for other ways of reducing the pressure on the people.
On the other hand, Mbadi said that the current matatu strike is uncalled for because the country is facing an international fuel problem as a result of global conflicts and oil price hikes.
According to Mbadi, there has been an increase in the price of diesel internationally after the tension that arose between the USA and Iran at the beginning of the year.
However, he emphasized that the disturbance in the transportation sector may be harmful to the nation’s economy.
Mbadi observed that the cost of diesel globally has soared since tensions between the two nations arose earlier this year, having a negative impact on economies around the world.
However, the CS reiterated that the disruptions may cause more damage to the economy and limit the government’s capacity to insulate the citizens against high costs.
“We must debate and discuss soberly. The economy is going to be hit further, and when the economy is hit further, we have even fewer resources to subsidise prices,” he said.
