In response to months of fervent anti-government demonstrations prompted by steep escalations in petrol, kerosene, and diesel prices, the Kenyan government has taken a significant step by reintroducing fuel subsidies.

On Monday, the Energy and Petroleum Regulatory Authority (EPRA), the nation’s energy overseer, disclosed that oil marketing companies would receive compensation from the Petroleum Development Fund. This move seeks to address the pressing concerns of citizens grappling with the high cost of fuel.

Notably, the regulator has declared a temporary freeze on the maximum retail price of petrol, maintaining it at 194.68 Kenyan shillings ($1.35) per liter for the upcoming month. This decision effectively shields consumers from an anticipated hike of 7.33 Kenyan shillings ($0.05) per liter.

EPRA’s intervention extends beyond petrol, as it also outlined the implementation of modest subsidies for kerosene and diesel. As the nation grapples with economic challenges, this initiative is poised to offer some relief to the general populace.

“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,” the statement reads in part.

In Kenya, retail fuel prices are set in the middle of each month.

The development means the price of petrol, diesel, and kerosene will remain unchanged until September 14.

After taking office in September last year, Kenyan President William Ruto removed fuel and maize flour subsidies put in place by his predecessor, citing the need to subsidize production rather than consumption.

He said his administration would reduce food production costs and increase output by subsidizing inputs such as fertilizer and quality seeds.

“In addition to being very costly, consumption subsidy interventions are prone to abuse, they distort markets and create uncertainty, including artificial shortages of the very products being subsidized,” Ruto had said.

In Kenya, inflation reduced to 7.3 percent in July from 7.9% a month earlier, largely due to falling food prices.

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