Energy Secretary Monicah Juma has stated that the government will end the fuel subsidy program, predicting higher gasoline prices and an increase in the cost of basic goods and services in the coming months.Â
Dr. Juma stated on Thursday that the surge in global crude prices above $100 per barrel has strained the fuel stabilisation fund due to the significant increase in compensation to oil majors to keep pump prices low.
Kenya has spent Sh67 billion in the current fiscal year to stabilize pump prices, with the total expected to reach Sh84 billion by the end of this month.
In Nairobi, a litre of super and diesel now costs Sh159.12 and Sh140, respectively, while a litre of kerosene costs Sh127.94.
Without the subsidy, super and diesel would have cost Sh184.68 and Sh188.19 per litre, respectively, while kerosene would have cost Sh170.37 per litre.
Crude oil prices have been steadily rising in the global market since the beginning of the year, as a result of the Russia-Ukraine conflict, which has disrupted supplies.
Current fuel prices are based on the price of crude per barrel, which is currently $112.48, and further increases in commodity costs will cause diesel and super prices to reach all-time highs by the end of the year.
The Petroleum Development Levy-supported subsidy fund has been depleted.
