Kenyans should brace themselves for the highest fuel prices in Kenya’s history if there’s no subsidy today. This is because in the absence of subsidy, which the government has been struggling to pay up, fuel will rise by as much as Sh. 40 per litre.
“Without the subsidy, the prices are likely to jump by up to Sh. 40 a litre based on the cost of cargos that were shipped this month,” the CEO of a top marketer told a local daily.
This will push diesel prices to Sh. 155 a litre and petrol at Sh. 174. Last month, if there had be no subsidy, a litre of super would have increased to Sh. 155.11 while diesel would have retailed at Sh. 143.16 per litre of diesel.
Last month, the energy regulator increased diesel and petrol prices by Sh. 5 a litre to retail at Sh. 115.60 and Sh. 134.72 respectively.
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With the ongoing shortages, Kenyans have been reporting that they are buying fuel at highs of Sh. 200 at certain fuel stations where the commodity is available. And even at these highs, sellers have been limiting buyers to purchases of not more than Sh. 1,000.
Through the subsidy, the national treasury has been demanding that oil marketers sell their fuel at a loss. This loss is then supposed to be compensated by the government through the fuel subsidy.
However, the government has been failing to pay up, leaving oil marketers exposed to selling their fuel at a loss without any forthcoming compensation, and causing fuel prices to rise illegally as supply thins out.
