Motorists are set to benefit from a Government subsidy that will cushion them from high diesel costs despite global fuel prices skyrocketing to Ksh5,612 per barrel.
The subsidy will be covered by billions raised from fuel consumers through the Petroleum Development Levy that was increased from Ksh0.40 to Ksh5.40 back in July.
The Energy Ministry revealed that Kenyans will be cushioned from diesel prices above Ksh5,612 per barrel in the subsidy plan that does not cover petrol.
The subsidy is designed to cushion consumers from the volatile fuel prices but motorists are set to end up paying Ksh5.40 for a litre at the pump.
The subsidy amount offered to consumers will be determined by Petroleum Cabinet Secretary John Munyes when fuel prices increase by huge amounts in the monthly reviews.
Energy Ministry adds that the subsidy will ensure local firms and motorists do not suffer the sharp increase caused by the global market price changes.
The fund which is estimated to collect around Ksh2 Billion monthly will be activated next year if the crude oil prices fail to decrease below Ksh5,572 ($50) per barrel.
A lift in Covid-19 restrictions around the globe has led to an increase in demand for fuel as some of the economies embark on recovery plans.
The Energy and Petroleum Regulatory Authority (EPRA) which was established under the Energy Act, reviews petroleum prices every 15th day of the month.
The latest prices released in November by the regulatory authority revealed that the retail prices of Super Petrol, Diesel and Kerosene dropped by Ksh1.42, Ksh2.21 and Ksh2.10 respectively per litre.
Following the revised changes, Super petrol, Diesel and Kerosene was set at Ksh105.85, Ksh90.70 and Ksh81.63 respectively.
