Gov't interventions averted fuel price crisis: CS Wandayi says

For weeks, Kenyans have watched international news with one eye on the Middle East and the other on the fuel gauge. The war in Iran has sent global crude prices on a sharp rise, sparking fears of a domestic economic strain.

As the global energy market reels from the shockwaves of the conflict in the Middle East, Energy Cabinet Secretary Opiyo Wandayi has stepped forward to defend the state’s interventions to cushion Kenyans.

With fuel prices threatening to spiral out of control, the CS insists that without a strategic mix of subsidies, tax cuts and the government-to-government (G-to-G) framework, pump prices would have reached a breaking point for the common mwananchi.

The numbers on fuel station boards across the country have become a source of anxiety. In just 30 days, the landed cost of petroleum products rose sharply.

“In a span of one month, the cost for those three products went up by those margins: 42% for petrol, 69% for diesel, and 105% for kerosene. So it was critical for the government, under the directive of the Presidency, to take the measures it took. By applying a subsidy from the Petroleum Development Levy, the government has applied Ksh.6.2 billion to cushion Kenyans,” said Wandayi.

According to the CS, without the Ksh.6.2 billion stabilisation fund and the recent VAT reduction, pump prices would have been significantly higher.

“That has enabled the petroleum product prices to be contained. If those two actions were not taken, the price of Super Petrol would have been Ksh.217, Diesel Ksh.236, and the price of Kerosene Ksh.261 per litre,” he said.

While petrol and diesel drive the economy, kerosene—widely used by low-income households—received the most direct intervention, with the government freezing further price increases.

“For kerosene, we took that very bold move not to allow it to increase by even a shilling because kerosene is a product that is used by the very low in society across all the regions,” Wandayi noted.

Beyond subsidies, Wandayi credited the G-to-G framework for stabilising supply and pricing by fixing key cost components.

“Under the G-to-G framework, premium and freight components remain fixed and constant. For petrol, it is 84 dollars per metric tonne; for diesel, 78; and for Jet A1, 97 USD. That is a cost which was negotiated by the Government of Kenya,” the CS stated.

The CS, however, declined to address concerns over alleged irregular petrol imports that led to the exit of several senior officials in his docket.

He also did not comment on current and future fuel stocks, or calls from the private sector and political leaders to further reduce fuel prices.