NAIROBI, Kenya, May 16 – The Consumer Federation of Kenya (Cofek) has decried the high cost of fuel, which it says will negatively impact consumers who are already battling high costs of goods and services.
Cofek Secretary General Stephen Mutoro says that the hike will have a ripple effect on the prices for electricity, transport, food, and health, among others.
While it does not support the reinstatement of the fuel subsidy program, Mutoro said this should have been done gradually.
“Our attention is drawn to the hike by the Energy and Petroleum Regulatory Authority (EPRA) on May 14, 2023 in which a litre of petrol is retailing at Sh182.70 in Nairobi,” Mutoro said in a statement.
“We are concerned that while we do not support long-term subsidies, the steep rise in fuel prices will make the already bad economic outlook even worse. It will trigger unintended consequences. It should have been made gradual,” he said.
“Costs of electricity, transport, food, health and education services will go up. Consumer spending will shrink and production will plummet to the detriment of the entire economy. People will be required to spend more while earning less.”
Starting yesterday, EPRA increased prices for super, diesel, and kerosene in Nairobi by Sh3.40, Sh6.40, and Sh15.19, respectively.
This means that motorists in the city will have to fork out Sh182.7 for petrol, Sh168.4 for diesel, and Sh161.13 for kerosene.
EPRA attributed the high prices to a rise in the average landed cost of imported super petrol, which has moved up by 8.63 percent in a span of one month.
“Accordingly, we urge the National Treasury and Budget Committee of the National Assembly to immediately review the excessive taxation on fuel and electricity. Ideally, fuel should be zero-rated. At the very worst, VAT shouldn’t exceed 4 percent on fuel,” Mutoro added.
Plans to increase VAT on fuel from 8 to 16 percent under the Finance 2023–24 Bill, he says, will cause more harm than good to consumers.
“Considering the huge price difference between Super Petrol and Kerosene, we call upon consumers to be vigilant since we anticipate an upsurge in fuel adulteration,” he added.
