Despite President William Ruto’s decision to end the subsidy, Central Bank of Kenya Governor Dr Patrick Njoroge predicts that fuel prices will fall by December.
Njoroge explained on Monday, during the Members of Parliament induction, that while the cost of fuel in the international market had reached a record high in recent months, it had begun to fall.
“As you can see it had gone as far as $130 a barrel, that was in March and now it has come down to $93 a barrel,” Njoroge said.
“The expectation is that this will come even more to the point where we wouldn’t have to have the subsidies.”
He attributed the drop to the return to relative normalcy in oil-producing countries.
While the regulator will carry out its mandate by attempting to control inflation, a more permanent solution will be realized when the cost of fuel falls.
The Governor agreed with President William Ruto that subsidies were bad for the economy and could lead to higher inflation in the country.
“It is true we eliminated the fuel subsidies on the Super, Diesel…. We have the price coming down and thus the gap is widening so the pressure on the consumer and the government becomes less and less. That is the expectation but let’s wait and see,” he noted.
