Motorists in Kenya are likely to buy a litre of petrol at a high of Sh215 ($1.79) from September 14 if the fuel subsidy is finally scrapped.
Also compounding the situation and which might see oil companies say no to any further subsidy is the high debt owed them.
This is expected to be the first headache for President William Ruto, who will be sworn in on Tuesday.
Economic analyst Jerry Mugera believes stabilising fuel prices will be Ruto’s first major assignment considering a spike will have a huge spiral effect on inflation which hit 8.5 per cent in a recent monthly review.
”Voters will be expecting a miracle from Ruto. I bet he is alive to this fact,” Mugera said.
In the third review of the International Monitory Fund (IMF) $2.34 billion loan, Kenya committed to end the fuel subsidy before October.
The subsidy has been used to cushion consumers from high global prices.
The international lender is against the initiative that has cut retail fuel prices by over Sh20 per litre for almost a year now.
The Energy and Petroleum Authority of Kenya (EPRA) retained fuel prices in the last review as the government utilised the Petroleum Development Levy (PDL) to cushion consumers.
Until September 14, a litre of Petrol will retail at Sh159.12, Kerosene at Sh127.9 4 and diesel at Sh140
Without the subsidy, prices in the last review would have increased to Sh214.13 for diesel, Sh206.17 for petrol and Sh 202.11 for Kerosene.
The National Treasury had diverted Sh18.1 billion meant for the stabilisation of fuel prices to fund energy and infrastructure projects.
Source: https://energynewsafrica.com