- Regulations governing the subsidy for petroleum products should be as clear as possible about when the state can leverage the fund to protect consumers.
- The implementation of the fund should not be left to the whims of the parent ministry.
- The goal of its creation was to avoid high fuel prices when global crude rises, something that is beyond the influence of the government.
Regulations governing the subsidy for petroleum products should be as clear as possible about when the state can leverage the fund to protect consumers.
The implementation of the fund should not be left to the whims of the parent ministry. The goal of its creation was to avoid high fuel prices when global crude rises, something that is beyond the influence of the government.
The scheme is intended to kick in whenever world oil prices exceed $ 50 (Sh5,486) per barrel. This has not been the case.
The subsidy was introduced in April to avoid public protests by Kenyans suffering from the economic crises of the Covid-19 pandemic.
As it currently stands, the government can decide when to ease pressure on consumers and when not, leaving households and businesses at the mercy of the ministry.
For better planning, companies must operate in an environment of certainty. While that is not the case today, it is what should cause the ministry and other stakeholders to burn the midnight oil.
Kenyans deserve to know about the events that may lead to the introduction of the grant.
The subsidy comes from billions of shillings collected from fuel consumers through the oil development tax, which was increased to Sh5.40 a liter in July last year from Sh0.40.
The subsidy fund, which has raised more than 15 billion shillings, has seen consumers save an average of 14.59 shillings and 19.54 shillings per liter of diesel and kerosene, respectively, since April.
This money, if put to good use, can protect consumers from the effects of high global oil prices.
There are also increasing calls for a review of the pricing formula used to set the prices of diesel, gasoline and kerosene in the monthly review.
The high cost of energy has resulted in an unbearable cost of living for most homes. Most Kenyans are struggling to put food on the table in the wake of a global health pandemic that wiped out most people’s jobs and incomes.
Taxes and levies represent Sh57.77 per liter of super gasoline, Sh45.52 per liter of diesel and Sh39.72 per liter of kerosene and were blamed for the sharp increase in product prices in the review from March 15 to 14 of April.