Government reinstates fuel subsidy to stabilize pump prices


The government on August 14, 2023, maintained the prices of petroleum products that have been in use since July 14, 2023, after reinstating the subsidy program for the product prices.

“Therefore, starting from Tuesday, August 15, 2023, the prices of petroleum products, including petrol, diesel, and kerosene, will not change. These prices will remain at Sh194.68 per liter for petrol, Sh179.67 per liter for diesel and Sh169.48 per liter for kerosene in Nairobi,” the Energy and Petroleum Regulatory Authority (EPRA) said in a statement sent by the Director-General of the authority, Daniel Kiptoo.

The Kenya Kwanza Government had dismissed the plan to subsidize fuel prices starting from May 2023, a move that contributed to the prices of petroleum products rising by up to Sh13 per liter.

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According to EPRA, the restoration of fuel price subsidies is aimed at protecting Kenyans from the sharp increase in prices caused by the increase in the prices of the product in international markets.

“In order to cushion consumers from the spike in pump prices as a consequence of the increased landed costs, the government has opted to stabilize pump prices for the August-September 2023 pricing cycle,” read a statement by EPRA.

“Oil marketing firms will be compensated from the Petroleum Development Fund (PDF),” added the statement.

This means that under this new plan, the government will subsidize Oil Marketing Companies (OMCs) by implementing a strategy to prevent them from raising fuel prices.

Had the government not provided the subsidy, it is estimated that the prices of petrol, diesel, and kerosene would have increased by Sh7.33, Sh3.59, and Sh5.74 per liter, respectively.