Deputy President Rigathi Gachagua now asserts that the Israel-Hamas conflict will worsen the fuel price situation.
This is just one week after the Energy and Petroleum Regulatory Authority (EPRA) increased petrol prices by Ksh5.72 per liter, diesel prices by Ksh4.48, and kerosene prices by Ksh2.45.
Speaking to a gathering of professionals and politicians from the Mt. Kenya region at the Nyeri Golf Club on Saturday, the second-in-command defended the government, stating that the factors influencing fuel costs are beyond their control.
Gachagua stated,
“Another crisis is emerging in the Palestinian-Israeli conflict, and that is detrimental to fuel prices.”
He added,
“Many have accused the government of causing the rise in fuel prices. No responsible government would do that.”
Additionally, Gachagua pointed out that Kenya’s fuel prices, which reached a record high of Ksh. 217 per liter in Nairobi a week ago, are similar to those in neighboring countries within the East African Community Bloc.
Subsidy
He also ruled out the possibility of the government reinstating a subsidy to stabilize retail fuel prices. He argued that if a subsidy were reinstated, the government would need to increase taxes to cover the cost.
Gachagua stated,
“If we subsidize fuel today, we’ll have to collect that money from somewhere, and we will have to add more taxes…so we are saying we cannot subsidize fuel because that money will have to come from somebody, and that money would have to come from the taxpayer.”
He emphasized that the situation is a global issue.
Furthermore, the Deputy President attributed Kenya’s current financial challenges to a USD 2 billion Eurobond loan, which he claimed was not well thought out.
He noted that the loan’s interest rate of 16 to 17 percent is nearly impossible to sustain.
Gachagua revealed that despite Kenya’s revenue collection of approximately Ksh. 2.2 trillion, the entire sum is consumed by debt repayment and salary payments.
Therefore, Gachagua said,
“Paying the public debt and paying salaries wipes out Kenya’s Ksh. 2.2 trillion revenue collection. We are left without any money for development.”
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