The Energy and Petroleum Regulatory Authority (EPRA) has clarified that the government has not reinstated fuel subsidies.
EPRA director general Daniel Kiptoo on Tuesday said the government has instead reverted to fuel stabilization through the Petroleum Development Levy (PDL).
This then means that for every litre of petrol a motorist purchases, a fraction goes to the PDL for stabilization.
Mr Kiptoo further explained that the fund was being misused by the former regime especially by the “handshake” brothers; retired President Uhuru Kenyatta and Raila Odinga.
“The holding of pump prices today is consistent with the policy pronouncements of the Kenya Kwanza Administration. One what has been applied is stabilization not a subsidy,” said Mr Kiptoo.
He also noted that the levy was put in place to cushion Kenyans from hiking prices of petroleum products.
“The PDL is a fund for a rainy day such as this one. We have not applied any exchequer funding which would be a subsidy but simply given back to Kenyans their money which we have collected from them in the past. It is within the funds that have been collected and does not need any exchequer support as was the norm in the previous administration which employed exchequer funds which made it a subsidy,” he added.
He asserted that the PDL is anchored in law.
Read: Fuel Prices Remain Unchanged in Latest EPRA Review
“If you look at the Kenya Kwanza manifesto we committed to ring fencing the fund to cushion pump Prices in a day like today,” he said.
On Monday, EPRA kept the prices of fuel unchanged in the latest review following the arrival of a cheaper consignment.
Earlier reports also indicated that the government had reintroduced the subsidies preventing the prices from crossing the Sh200 mark.
“In order to cushion consumers from the spike in pump prices as a consequence of the increased landed costs, the government has opted to stabilize pump prices for the August-September pricing cycle,” said EPRA.
The authority said the oil marketing companies will be compensated from the Petroleum Development Fund. Without its intervention, EPRA said, the prices of petrol would have risen to Sh202.01 a litre, diesel to Sh183.26 a litre and kerosene would have increased to Sh175.22 a litre in Nairobi.
But instead the prices will remain unchanged at Sh194.68 (petrol), Sh179.67 (diesel) and Sh169.48 (kerosene).
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