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William Ruto
The Kenyan government has reinstated a small subsidy in a bid to stabilise retail fuel prices for the next 30 days, following violent protests that rage for months.
According to Reuters, the country’s Energy and Petroleum Regulatory Authority (EPRA) made this known on Monday 14th August.
It further said that the move was a reversal of government policy that has sparked national outrage over the high cost of living.
President William Ruto, after assuming office last September, removed fuel and maize flour subsidies that were put in place by his predecessor, saying he preferred subsidising production rather than consumption.
The move was also projected at reducing government spending as it seeks to get a handle on debt repayments that have forced it to deny market speculation about a possible default.
But the subsidy cuts as well as recent tax hikes have increased living costs and contributed to violent anti-government protests in recent months.
The energy regulator said the maximum retail price of a litre of petrol would remain constant at 194.68 shillings ($1.35), shielding consumers from an increase of 7.33 shillings, which the government will shoulder through a price stabilisation fund.
Retail fuel prices are set in the middle of each month and Kenya’s government also applied small subsidies on kerosene and diesel, according to EPRA.
However, Reuters reported that ERPA did not provide an explanation for the government’s decision as officials from EPRA, the energy ministry, and the finance ministry did not immediately respond to requests for comment.
Fuel prices shot up when Ruto removed the subsidies. They spiked again in July after the government pushed through parliament a contentious law that doubled the fuel tax.
The protests organised in response to that law were called off last month after the opposition and Ruto agreed to talks to resolve their differences, the second such attempt this year.
