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EPRA: Government Has Not Reinstated Fuel Subsidies

The Energy and Petroleum Regulatory Authority (EPRA) has released a statement clarifying that the government has not reinstated fuel subsidies.

fuel subsidies

According to EPRA’s CEO, Daniel Kiptoo, the introduced Petroleum Development Levy was used as compensation to stabilize oil prices. This is in contrast to the initial assumption that the government had instated a fuel subsidy to cushion the citizens.

“What has been applied is stabilization, not a subsidy. The petroleum development levy was put in place to cushion Kenyans from spikes in petroleum pump prices, “he explained.

He then pointed out that the stabilization of pump prices is in line with the Kenya Kwanza Administration’s policy’s pronouncements.

“If you look at the Kenya Kwanza manifesto we are committed to ring-fencing the fund to cushion pump prices in a day like today,” said the CEO.

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According to his statement, the petroleum development fund was a fund set aside for a rainy day. Therefore, no public funds were used to cushion Kenyans from the cost of fuel.

Is it a Subsidy?

For the funding to be considered as fuel subsidies, one needs to involve the support of an exchequer.

The CEO explicitly pointed out that the funding did not involve the support of an exchequer and so wouldn’t qualify to be a subsidy. It was, however, a way to give Kenyans back the money collected from them in the past.

“It is within the funds that have been collected and do not need any exchequer support as was the norm in the previous administration which employed exchequer funds which made it a subsidy.”

The statement from Daniel comes after people responded to government intervention in oil prices. People termed the move as a U-turn from the previous statement made by the President on how harmful subsidies were in the first place.

Read Also: Fuel Prices Remain Unchanged Amid Government Compensation


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