New fuel prices: Petrol to sell at Sh. 179.30, diesel at Sh. 165

Fuel prices have risen to another historic high in Kenya. Kenyan motorists will from midnight today buy petrol at Sh.179.30 per litre.

This follows the removal of subsidy on petrol. However, diesel and kerosene will continue to be subsidized at Sh. 20.82 per litre and Sh. 26.25 per litre.

In the latest review, a litre of diesel has risen by Sh. 25 per litre while a litre of kerosene has risen by Sh. 20 per litre.

Diesel from Thursday cost Sh.165 up from Sh.140 in August while a litre of kerosene will retail at Sh.147. 94 in contrast to Sh.127.94 previously.

President William Ruto’s government has said that it will do away with the fuel subsidies as they are not sustainable.

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Through the subsidy, the national treasury under the previous government had been demanding that oil marketers sell their fuel at a loss. This loss was then supposed to be compensated by the government through the fuel subsidy.

However, the government had 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.

According to President Ruto, the fuel subsidies have gobbled up Sh.144 billion in taxpayers funds to include Sh.60 billion in the last four months.

“If the subsidy continues to the end of the financial year, it will cost taxpayers Sh.280 billion equivalent to the entire national government development budget. In addition to being very costly, consumption subsidy interventions are prone to abuse, distort markets and create uncertainty including artificial shortages of the very products they seek to subsidize,” he said.

“The interventions in place have not borne fruits. Our people are confronted daily with increasingly unaffordable prices, especially food and transport.”