Kenyan President Rules Out Further Fuel-Tax Cuts After Protests

William Ruto Photo by David Dee Delgado /Photographer: David Dee Delgado/

Article content

(Bloomberg) — Kenyan President William Ruto ruled out further cuts to fuel taxes, even after deadly protests over the high cost of diesel brought the nation’s capital to a standstill this week.

Article content

The East African nation spent 28.2 billion shillings ($217 million) since the start of the US-Israeli war on Iran to keep fuel prices artificially low through subsidies and tax breaks, Ruto told reporters in the port city of Mombasa on Friday. While the authorities will lower diesel prices by 10 shillings per liter next month, there’ll be no more reductions in levies, he said. 

Article content

Article content

Article content

“There are those asking government to remove all taxes and levies on fuel immediately, but we must ask ourselves, honestly, if we stop collecting these revenues entirely, what public services shall we stop funding?” Ruto said. “The reality is that no country can completely escape the global oil shock of this magnitude.”

Article content

Article content

Kenyan public transport operators staged a two-day strike this week over the high cost of diesel that sparked protests in which at least four people died. Despite the Kenyan authorities’ interventions, diesel costs have jumped 40% and gasoline prices 20% since the start of war in Iran on Feb. 28. The conflict has disrupted shipping through the Strait of Hormuz — a conduit for about a fifth of the world’s oil supply.

Article content

The protests followed similar unrest in Comoros. Last week a transport strike over steep fuel-price increases paralyzed the Indian Ocean archipelago and forced the government to temporarily backtrack.

Article content

Rising fuel prices have intensified pressure on Kenya’s import-dependent economy, which the International Monetary Fund already considers at high risk of debt distress.

Article content

Article content

The public-transport operators called off their strike after meeting the president, Edwin Mukabane, chairman of the Federation of Public Transport Sector, said at the briefing.

Article content

The nationalization of Kenya’s oil imports has ensured security of supply and eased pressure on foreign-exchange demand, Ruto said. The country is also determined to bring into production oil deposits in the north of the country and is working with neighbors to develop a regional refinery, he said.

Article content

That will help Kenya and eastern Africa build “necessary resilience,” Ruto said. The nation is also accelerating investments in renewable energy, modern public transport and energy security infrastructure “so that future generations of Kenyans are less exposed to global fuel instability.”

Article content

Ruto announced that the authorities will allow duty-free imports of the first 100,000 electric vehicles shipped into Kenya. The government has already ordered 3,000 electric vehicles for use by security agencies, he said.

Article content

Banks should also consider temporary relief on loans to public-transport operators, the president said.

Article content

Sign up here for the daily Next Africa newsletter and subscribe to the Next Africa podcast on Apple, Spotify or anywhere you listen.

Article content