After the Energy and Petroleum Regulatory Authority (EPRA) on Tuesday, June 14, announced an increase in fuel prices, the National Treasury has revealed that the prices could go even higher.
In a statement on Wednesday by Treasury CS Amb. Ukur Yatani, the price of the commodity could be higher if the government gradually removes the current fuel subsidy.
Yatani said that the government has been subsidizing fuel prices to ensure that they could not push push the prices of basic commodities beyond the reach of Kenyans.
He, however, said that the fuel subsidies are not enough and have often led to misallocation of resources and the cost of the fuel subsidy may surpass its allocation.
“The cost of the fuel subsidy could eventually surpass its allocation in the National budget, thus potentially escalating public debt due to unsustainable levels and disrupting the government’s plans to reduce the rate of debt accumulation.
“For this reason, a gradual adjustment in domestic fuel prices will be necessary in order to progressively eliminate the need for the fuel subsidy, possibly within the next financial year,” read part of the statement by Amb. Yatani.
In its monthly review, EPRA announced that it had increased the prices of super petrol, diesel, and kerosene by 9.00 per litre respectively.
The new prices will be in place for the next 30 days and changes either upwards or downwards or remaining the same will be announced on July 14, 2022.