Scrapped Fuel Subsidy To See 30pc Fare Rise By PSVs

Public Service Vehicles (PSVs) will announce a 30 percent fare increase after fuel prices hit a historic high on the partial drop of the subsidy that has offered relief to motorists over the last year.

The Federation of Public Transport Sector says the rise will be countrywide to factor in the recent fuel prices.

In the latest monthly review by the Energy and Petroleum Regulatory Authority (EPRA), Super petrol is up by Ksh20.18 to retail at Ksh179.30 per litre in Nairobi.

“We are having a major meeting that brings together all players in the transport sector. One of the resolutions will include countrywide adjustment on PSV fares by between 20-30 percent,” said Edwin Mukabana, the lobby’s Chairman.

The latest review will see diesel prices rise by Ksh25 to retail at Ksh165.00 per litre while kerosene is up by Ksh20 to retail at Ksh147.94 per litre.

The new prices run until October 14. The energy regulator said although the subsidy for Super petrol has been abolished, a subsidy of Ksh20.82 per litre and Ksh26.25 per litre has been retained for diesel and kerosene respectively.

The prices are exclusive of Ksh8 percent value-added tax in line with the provisions of the Finance Act 2018, the Tax Laws (Amendment) Act 2020 and the revised rates for excise duty for inflation as per Legal Notice No. 194 of 2020.

The review comes at a time President Ruto has indicated he will drop the fuel subsidies, setting up Kenyans for higher transportation and production costs.

Dr. Ruto said in his inauguration speech that the economy cannot sustain consumption subsidies, pointing to a policy shift that may see him leave the prices of food and fuel to be determined by market forces at least in the near term.

The record prices will unleash inflationary pressure on the cost of living as manufacturers of goods, transporters and service providers pass the increased cost of fuel to the consumer.