Nothing To Smile About As Petrol Price Set to Hit 130 Shillings in September: Will Kenyans Have Any Space to Breathe?

Fuel has become an indispensable part of our day-to-day life, and we can’t imagine our life without it.

Virtually everything in Kenya, including the generation of electricity, is anchored on the wheels of fuel.

Whenever the price of fuel is changed, either upwards or downwards, the effects are felt down through the value chain.

In the recent months, the prices of fuel have been skyrocketing, with almost every sector feeling the heat. The price of kerosene, for instance, just moved through the roof for more than 60 percent of households in Kenya who use it for lighting and heating.

The hiking of fuel prices directly or indirectly affect all the major sectors such as transportation, textiles, manufacturing sectors & transportation sectors.

This, in turn, affects the prices of daily essential commodities which are transported on a daily basis. This can also be seen in the escalating inflation rate that has been steadily rising.

Increase in fuel price has also increased food prices. This has had a more severe impact on poor people because poor households spend more than half of their income on food and only a tenth on fuel.

Increase in petrol price has increased the transportation cost, increase in transportation cost has increased price of goods, and this increase in the price of goods has gradually forced the people to loosen their pockets even more, and so on like this, the chain will further propagate.

These ups and downs have pushed more people into poverty and leading to a more pathetic situation of those already poor. This has obviously sent shock waves to the common man who is trying hard to make both ends meet.

The table below the change in Super Petrol, Diesel and Kerosene for the 12 months in 2017:

The year 2018 has not been different. Fuel prices have been rising each month. See the table below:

Petrol to Hit 130 Shillings in September

News that the price of petrol will hit 130.15 shillings per liter in September has left Kenyans shocked and up in arms against what they term as the government’s effort to squeeze every last penny out of them.

The increase in petrol prices will be more by 17.9 shillings compared to the current prices attracting 16 percent of the VAT. Diesel will equally go up by 16.5 shillings to retail at 19.77 shillings per liter after the tax.

Diesel is used in powering of most engines in Kenya. This implies that the cost of transport, as well as the cost of production of goods, will increase, further burdening Kenyans. This will also impact heavily on the inflation rate given that the price of basic commodities such as food will rise immensely.

Kerosene consumers are in for a rude shock too. The price is set to leap by 13.7 shillings to 99.44 shillings per liter. More than 60 percent of households in Kenya depend on kerosene for heating and lighting.

The government seems to have all systems go in making sure that the revenue is collected no matter where it is coming from. Estimates show that the revenue collected from fuel upon implementation will earn the Treasury 71 billion shillings annually.

Pressure from the International Monetary Fund (IMF)

The IMF has been heaping pressure on the Kenyan government to drop tax exemption on various products so as to widen its revenue net and cut down on its borrowing appetite.

Kenya’s debt now stands at 5 trillion shillings, more than 60 percent of the country’s GDP, raising more concerns from both the World Bank and the IMF.