In a meeting with a caucus of professionals and politicians from the Mt. Kenya region at the Nyeri Golf Club on Saturday, Deputy President Rigathi Gachagua defended the government’s stance on the escalating fuel costs. Gachagua stated that the circumstances impacting fuel prices were “beyond our control.”
However, he added that the ongoing Israel-Hamas conflict is likely to further exacerbate the fuel price situation. This comes just a week after the Energy and Petroleum Regulatory Authority (EPRA) raised petrol prices by Ksh5.72 per liter, diesel prices by Ksh4.48, and kerosene prices by Ksh2.45.
Deputy President Gachagua emphasized the impact of global events on local fuel prices, stating, “Another crisis is manifesting around the Palestinians and Israel, and that is not healthy for fuel.” He also addressed accusations that the government was responsible for fuel price increases, stating, “No responsible government can do that.”
Regarding the fuel prices in Kenya compared to neighboring countries in the East African Community Bloc, Gachagua highlighted their similarity, saying, “the price of fuel here per liter is similar to the price per liter in Tanzania, Uganda, Burundi, Rwanda…and is the same everywhere.”
Gachagua firmly ruled out the possibility of the government reinstating a subsidy to stabilize retail fuel prices. He argued that such a move would require additional tax increases, further burdening taxpayers.
“If we subsidize fuel today, we’ll have to collect that money from somewhere, and we will have to add more taxes,” he explained. “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.”
The Deputy President also attributed Kenya’s financial challenges to a USD 2 billion Eurobond loan, which he claimed was not properly considered. He expressed concerns about the loan’s high interest rate of 16 to 17 percent, stating that it is nearly unpayable. Gachagua highlighted the impact of debt repayment and salaries on Kenya’s finances, saying, “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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