Government is lying about the real reason behind current fuel crisis

Audio By Vocalize

The national government’s response to the astronomical rise in fuel prices has been farcical, provocative, and absurd, but unexpected of a predatory and inept regime.

Farcical because the President and his Cabinet Secretaries (CSs) are lamenting and pretending to be helpless and innocent to explain away the regime’s complicity in inept policies that birthed this crisis.

It is provocative for State officials to dismiss wise counsel from independent economists and fiscal planners that would have averted this artificial crisis or mitigated its most adverse effects. Instead of implementing urgent proactive measures to assuage public anxiety, the CSs in charge of Energy and the National Treasury have resorted to shrill sermons and Orwellian platitudes to protect the regime’s image.

The CSs chose to rationalise and repeat the President’s flawed energy policy logic and flip-flop on fuel. Not so long ago, the President advanced absurd logic that energy prices are higher here because Kenya’s neighbours are poorer. His CSs now regurgitate these hollow talking points.

When fuel prices rose in the wake of the outbreak of the Russo-Ukraine War in early 2022, Deputy President William Ruto dismissed President Uhuru Kenyatta’s explanation that high fuel pump prices in Kenya had been occasioned by global disruptions emanating from that conflict.

Dr Ruto questioned why, in spite of the conflict, petroleum was cheaper in Uganda, which imports its fuel through Mombasa port. Today, Ruto and his CSs proclaim that disruption by the current war in Iran is solely to blame for rising energy costs in Kenya because of the closure of the Strait of Hormuz.

The question that Ruto raised in 2022, but which he and his CSs now parry away conveniently, is: Why is fuel cheaper in Uganda, Ethiopia, and Kenya’s neighbours today? Does Kenya not import most of its fuel through Saudi Arabia’s Red Sea ports and pipelines that remain open? When will Kenya diversify the sources of petroleum imports?

This government is propagating a lazy excuse and lying about the real reason for the current fuel shortage and rising prices. The real culprit is predatory policies motivated by a conflicted Executive and its conniving new geniuses in the so-called broad-based government.

Clear interventions and policy reversals that can bring down or stabilise the cost of energy in spite of the Gulf crisis have been ignored by the Ruto regime to protect the profiteering of a corrupt clique. Ruto is not inclined to reverse this gravy train and the energy policies he introduced in 2023 and has escalated since.

These include the so-called G-to-G fuel agreement between Kenya and Saudi Arabia and another Gulf state. On the Kenyan side, this G-to-G construct is a monopolistic heist designed to benefit regime officials. The publicly stated goals of reducing or stabilising energy prices under the G-to-G are a cover to entrap the Kenyan state and profit a clique.

The Ruto regime embarked on a counterproductive reversal of fuel policies that had served Kenya well for decades. With chutzpah, Ruto abolished State-led fuel subsidies that were operated through the Fuel Stabilisation Fund. The regime has also tinkered with VAT on fuel products, including raising the tax to 16 per cent, only lowering it to 8 per cent under public pressure in a clever but half-hearted measure that has not offered much relief to ordinary Kenyans and investors.

You cannot abolish subsidies in a poor and developing nation like Kenya, raise VAT on fuel imports, and reject calls to establish a fuel reserve to forestall inevitable shocks and purport to be an expert in economics and fiscal planning.

Kenyans are painfully paying for the Road Maintenance Levy, increased under the Ruto regime, but cannot see the benefits of its creation and increment. Road infrastructure is collapsing as fuel prices climb. And the national government refuses to let go or share in the management of fuel levies with the devolved government.

No nation can advance without sustainable and sovereign control of energy or diversification of its energy sources. Kenya can afford a fuel reserve to check the effects of global fuel disruption. Kenya must also implement favourable taxation, operate pipelines, and in the interim subsidise or abolish all fuel import duty to cushion consumers and lower and stabilise the cost of production. Anything else is voodoo economics.

Follow The Standard on