Matatu operators are deliberating on whether to hike fare prices. This is a reverberation effect after the energy regulator, EPRA abolished the subsidy on Petrol, leaving the commodity to sell at a historic high of Sh. 179.30.
Diesel on the other hand still retains the subsidy, however, not enough to keep the amount at Sh. 140. Diesel will now sell at Sh. 165, despite there being a Sh. 20 subsidy.
The public transport scene will have to dig deeper into their pockets now as the majority of the PSVs consume Diesel for travel. Matatu Welfare Association Chairperson Dickson Mbugua confirmed that the Federation of Public Transport has organized a meeting next week to deliberate on the fuel prices situation in the country.
He said that if Matatu operators kept the fares unchanged, they would be operating at a loss.
“We are convening a meeting on Tuesday, to discuss whether or not to increase fares because Kenyans have been hit hard and if we hike the cost, they may not comfortably afford them,” he said.
Additionally, Dickson Mbugua said that the Federation would have to organize a meeting with President Ruto and plead with him to consider implementing a countermeasure solution for the Transport sector as he works to bring down inflation levels in Kenya.
“We are looking to lobby the government to consider the PSV sector as an essential service and possibly give some kind of remedy or offer discounted rates,” he said.
Ruto promised in his maiden presidential speech that he would do away with the fuel subsidy as they are not sustainable and were slowly eating away at the taxpayer’s money meant to be used in development of other projects.
“The interventions in place have not borne any fruit. On fuel subsidy alone, the taxpayers have spent a total of Sh. 144 billion, a whooping Ksh60 billion in the last four months. If the subsidy continues to the end of the financial year, it will cost the taxpayer Sh. 280 billion.” Stated William Ruto.
The fuel regulator, EPRA has revealed that despite abolishing the subsidy on petrol and overally increasing fuel prices, there is a plan that has been laid out by the government to remedy the inflation pressure.
EPRA Director General Daniel Kiptoo stated that instead of being over-reliant on imported energy, Kenya would begin to use their leverage on abundant local energy such as geothermal power, wind energy and solar energy. Globally, Kenya is a leading producer of geothermal power.
Energy stakeholders will also be in negotiations with the government to lower taxes. This will replace the subsidy program, which even the IMF claimed to be unsustainable.
Mr. Kiptoo reassured Kenyans that President Ruto was correct in his decision to abolish the fuel subsidy. He also echoed former president Uhuru Kenyatta’s judgment of the situation, that fuel prices are a global issue and it’s not just Kenya that is suffering.
“Subsidies are not good and are unnecessary in certain extraordinary circumstances.” He said during an interview.
Ruto’s government is also working to lay out plans to reinvest in oil fields and encourage local oil production, including Turkana Oil fields which had not been fully utilized.
Furthermore, Kenya Power has begun a wide-scale rollout of charging stations for Electric Vehicles in the country, as the country looks to utilize green energy by the year 2030.
They will also be installing charging stations in different households to encourage the use of electric cars.