Deputy President Rigathi Gachagua has expressed concerns that the conflict between Israel and Hamas will make fuel prices worse.
This comes just a week after the Energy and Petroleum Regulatory Authority (EPRA) raised petrol prices by Sh5.72 per liter, diesel prices by Sh4.48, and kerosene prices by Sh2.45.
Gachagua, speaking to a group of professionals and politicians from the Mt. Kenya region, defended the government, stating that the factors influencing fuel costs are beyond their control.
He said, “Another crisis is manifesting around the Palestinians and Israel, and that is not healthy for fuel.”
“Many people have accused the government of escalating the cost of fuel.
No responsible government can do that.”
“And again if you check, the price of fuel here per liter is similar to the price per liter in Tanzania, Uganda, Burundi, Rwanda…and is the same everywhere,” he added.
Gachagua also dismissed the idea of the government reintroducing a subsidy to stabilize retail fuel prices.
He explained that if a subsidy were reinstated, the government would have to raise taxes to cover the costs, which would ultimately burden the taxpayers.
He attributed Kenya’s current financial challenges to a USD 2 billion Eurobond loan that he claimed was not well-planned.
The high-interest rate of 16 to 17 percent on this loan makes it almost impossible to repay.
Despite Kenya’s revenue collection of Sh. 2.2 trillion, the entire amount is consumed by loan repayments and salary payments, leaving no money for development.
Deputy President Gachagua believes that the Israel-Hamas conflict will further impact fuel prices in Kenya, and he defends the government’s position, stating that the situation is beyond their control.
He also raises concerns about the financial burden of a high-interest Eurobond loan on Kenya’s budget
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