Over the past few days, Kenyan motorists have experienced a fuel crisis that has seen vehicles queue in petrol stations to get the precious commodity. An acute fuel shortage was reported in parts of the country from last week, including the North Rift.
Earlier this month, the Kenyan government partially applied the fuel subsidy , which would save consumers from paying Sh155.11 for a litre of petrol. The Energy and Petroleum Regulatory Authority(EPRA) said consumers would have paid Sh143.16 for diesel and Sh130.44 for kerosene had the state not intervened, underlining the importance of the subsidy. Delays in the subsidy payout mean that oil marketers either have to tap into their cash reserves or take loans to restock their fuel supplies.
This comes even as the landed cost of the products con
tinues to rise, leaving oil marketing firms in an even deeper conundrum. For instance, the landed cost of petrol rose 13.34 per cent to $676.4 (Sh77,717.88) per cubic metre in February, while that of diesel rose 11.74 per cent to $677.31 (Sh77,822.44). Kerosene increased the highest by 15.94 per cent to $619.57(Sh71,188.15).
Global crude prices have been on the climb following tight supplies due to the Russia-Ukraine conflict, with marketers warning of steeper prices in the next price reviews – further complicating matters for the state that already faces a dilemma over its fuel subsidy scheme. Oil prices on Wednesday jumped by more than $4 (Sh459.74) to $114.4 (Sh13,11.98) a barrel on supply tightness and prospects of new Western sanctions against Russia. Central Bank of Kenya Governor Patrick Njoroge said the government plans to gradually wean Kenyans off the fuel subsidy.
The fuel subsidy in Kenya will remain but it may not be at 100 percent. There will be adjustments that will put some burden on the consumers; this being a short term measure to ensure business continuity in the country