Subsidy withdrawal by the government has left many citizens exposed to higher costs of fuel, as the money set aside to buffer extreme fuel prices becomes expended. The government pulled back from applying subsidy on the recent pump prices announced by EPRA in its latest review which left the cost of super petrol retail at KES. 184.52, reflecting a small drop from previous petrol cost of KES.185.31.
The current retailing prices of fuel: super petrol (KES.184.52) Diesel (KES.171.47) and Kerosene (KES.154.78) show a slight drop in prices from the previous pump prices: Super petrol (KES.185.31) Diesel (KES.171.58) and Kerosene (KES.155.58) since the government did not apply any subsidy on them as well. However, the much previous cycle of price review left the cost of diesel unchanged at KES. 185.31 since the state applied a subsidy of KES. 2.04 to safeguard consumers from extreme prices.
Fuel subsidy trend.
The states move to subsidize fuel prices has had a great relief to consumers ensuring their protection from the effect of spiraling prices of oil in the global market. The fuel relief was applied to the commodity even in times when the global prices were low, which in turn protected consumers greatly. This was seen in May when prices for petrol and diesel were subsidized by KES.4.66 and KES. 6.09 respectively which was followed by a drop in pump prices of KES.2.20 and KES.1.95 for diesel and petrol respectively.
In the recent past, this has not been the case as Energy CS, Opiyo Wandayi, told Parliament that the government lacked 2.5billion needed to cater for fuel subsidy prior to August’s fuel price review cycle, which saw pump prices for diesel and petrol jumping up by KES.8.67 and KES.8.99 per litre respectively.
The Petroleum Development Levy (PDL) collections have for the past five years hiked collection prices for diesel and petrol by 1250% from KES.0.40 per litre. The government on the other hand made efforts to boost its collections so as to sustain fuel subsidy provisions however the money collected has been mismanaged severally hence leading to depletion of fuel subsidy.
Effect on consumers.
The overall effect of high fuel prices is majorly felt by consumers as it translates to increased costs on food and transport. Moreover, It reduces to a greater extent the customers purchasing power resulting to low outputs economically.
