Fuel crisis: The writing was on the wall, now you are on your own

President William Ruto accompanied by transport stakeholders at State House, Mombasa, addresses the nation over the ongoing fuel crisis on May 22, 2026. [Robert Menza, Standard]

It was long coming that Kenyans would be left on their own.

From the dramatic arrests without any charges of top energy and petroleum officials, to outright lies by line Cabinet Secretaries and cosmetic meetings that never yielded tangible solutions, it was evident that there was no deliberate plan to cushion Kenyans.

Then, on Friday, President William Ruto sealed the fate of Kenyans, offering nothing but a promise. 

When Ruto yesterday broke his silence to address the nation following a punishing week of walking to work, Kenyans expected him to offer some reprieve.

Ruto, however, was short on solutions to the high cost of fuel that has pushed Kenyans to the edge, and further threatening to hand the economy a major jolt.

The President, who was also unwilling to cede even a shilling of the money raised through taxing fuel beyond halving Value Added Tax, only offered a promise that the cost of diesel would come down by Sh10 per litre.

And even this is not guaranteed as computation of fuel prices is an independent mandate of the Energy and Petroleum Regulatory Authority (EPRA).

EPRA is established under the Energy Act, 2019 as the regulatory agency responsible for economic and technical regulation of the electricity, renewable energy, petroleum and coal sectors in Kenya.

But in a move that demonstrates how disconnected President Ruto’s administration is from reality, he said that after consultation with matatu sector players, and in addressing some of the issues that they had raised, his government would offer an enabling environment for the sector on use of artwork and graffiti on matatus. 

While creativity and self-expression through the artwork are key for all Kenyans and among the factors that define the country’s public transport sector, the record fuel prices threatening to cripple the economy, with far reaching impact on the PSV sector itself, would appear to be the more urgent problem. The graffiti conversation, seemed an assault to Kenyans whose expectations from the president were huge.

Following the consultations on Friday, the PSV operators called off the strike that had been suspended on Tuesday and ended the weeklong agitation for lower fuel prices.

What is, however, hurting Kenyans is that the high fuel cost has now been pushed to the ordinary citizen, effectively sealing their fate to survive on their own.

With matatus now set to pass the costs to commuters and the President appearing out of sync with the needs of his people, it appears now that Kenyans have been left to their own devices, with the future looking even more bleak. 

Other than high fares, other industries such as agriculture, manufacturing and transporters of commodities are also likely to increase cost of essentials including food.

This will hit Kenyans hard, with many already with high cost of essentials.

Inflation went up in April to 5.6 per cent from 4.4 per cent in March on account of high petroleum costs and expected to further go up in May following an even sharper hike in fuel costs.

Despite calls from multiple stakeholders to institute further measures to protect the economy, President Ruto yesterday ruled out such a possibility. 

The President argued that so far, the government incurred a revenue loss of Sh14.4 billion after it cut VAT rate on fuel by half to eight per cent.

He also argued that the government has spent Sh13.7 billion from the Petroleum Development Levy (PDL) Fund to cushion Kenyans from what would have been even high fuel prices. 

“In the last two pricing cycles alone, April–May and May–June 2026, the Government utilised Sh13.74 billion to cushion consumers. Secondly, working with Parliament, we have reduced VAT on petroleum products from 16 per cent to 8 per cent, foregoing Sh14.43 billion in tax revenue in order to reduce pressure on Kenyan families and businesses,” Ruto said. 

“In the April–May 2026 pricing cycle, the Government utilised Sh6.04 billion in fuel stabilisation and also forewent Sh6.41 billion in VAT revenue. In total, the Government spent Sh12.45 billion on stabilisation during that cycle,” he added.

The PDL is a motorists’ funded kitty, which the government taps into to cushion Kenyans from sharp spikes in cost of fuel.

Motorists pay Sh5.40 per litre of super petrol and diesel at the pump as PDL. 

Different stakeholders have argued that the government should spend more money from the kitty, but also consider further tax cuts.

Doing so could help prevent a catastrophic impact on the economy, which has been wobbly, recording a slowed growth of 4.6 per cent last year compared to 4.7 per cent in 2024. 

Kiharu MP Ndindi Nyoro has proposed a reduction of some taxes that could yield a significant reduction in the cost of fuel. 

Among the taxes he says can be reduced include a further scrapping of VAT on fuel, reduction of the Road Maintenance Levy (RML) by Sh7 to Sh18 per litre and reduction of excise duty by Sh9 per litre.

Others include the reduction of profit margins for oil marketers.

Nyoro has also proposed that the government allocates an extra Sh5 billion from the PDL Fund to subsidise diesel.

These reductions, he said, could yield a reduction of Sh54 per litre of diesel.

“We either spend money in reducing fuel prices now or the economy is going to suffer many more multiples of the money we would otherwise save through the spiral effect,” he said.

The Kenya Association of Manufacturers (KAM) too has pushed for the temporary reduction in taxes, noting the critical role fuel plays in an economy and also called on government to review taxes.

“Fuel prices have a far-reaching impact across the economy. They directly influence the cost of transportation, food production, agriculture, manufacturing, and the movement of goods and services nationwide, ultimately affecting the cost of living and the competitiveness of businesses,” said KAM in a statement. 

“The Government should consider reviewing various fuel-related taxes and levies to ease pressure on the economy.”

Despite the robust proposals, the government is however, unwilling to reduce taxes beyond the halving of VAT.

The President yesterday insisted that taxes are what the government uses to offer public services. 

“If we stop collecting this revenue entirely, what public services shall we stop funding? Do we go back to the spectacle of stalled road projects that had become a hallmark across the country? Do we stop the fertiliser subsidy programme that is enhancing food security? Do we cut the security budget that helps us secure our borders, combat criminal gangs, and protect citizens, including women and children? Surely our hospitals and schools must continue to function and be funded,” said the President. 

In explaining why the government might find it difficult to take further tax cuts, Irungu Nyakera, former PS planning, said securising about half of the Road Maintenance Levy makes it difficult to review it.

The government has already used Sh7 per litre of the Sh25 per litre road levy as collateral to raise Sh175 billion.

It plans to securitise another Sh5 billion to raise Sh120 billion, which would bring the total securitised amount to Sh12 per litre.

This leaves the road agencies and county governments with just Sh13 per litre to share for road maintenance. 

A 2024 increase in the levy, which pushed it to Sh25 per litre from Sh18, has resulted in a significant increase in annual collections to Sh115 billion from Sh86 billion.

Nyakera said that “of the Sh115 billion collected for road maintenance every year, Sh47 billion now goes to servicing debt, leaving only Sh68 billion to maintain 25,412 km of paved roads.

That translates to Sh2.7 million per km today, down sharply from Sh3.9 million per kilometre under (President) Uhuru Kenyatta.”

“The levy is unlikely to come down because it has already been pledged away for a decade.”

Petroleum is seen as being a low-lying fruit for the taxman due to the high volumes consumed to power industries as well as private motoring.

According to KRA data, the government collected about Sh340 billion from different petroleum taxes in the year to June 2025 or about Sh1 billion per day. This accounted for about 13 per cent of the total revenue of Sh2.572 trillion that KRA collected during the year.

The fuel crisis, which became more pronounced with the announcement of fuel prices for May-June cycle on May 14, has been in the making since March. Then, government officials got a glimpse of an impending crisis as the war in the Middle East escalated with no end in sight.

Senior officials from the Ministry of Energy and Petroleum procured emergency fuel imports.

The cargoes, however, became highly controversial, with the officials accused of overseeing importation of substandard fuel but also falsifying data to justify the import and breaking procurement laws.

The officials including the then Petroleum PS Mohamed Liban, Kenya Pipeline Company Managing Director Joe Sang and EPRA Director General Daniel Kiptoo, were arrested and their homes raided.

They were later forced out of office although the government officially said they had resigned.

Since their arrest on April 2 and resignation days later, the three have never been officially charged in court.

Kenya has since been experiencing a shaky supply of petroleum products, with countrywide shortages reported over the two months.

While there has been speculation that the oil firms were eyeing higher prices over the two cycles, industry players have said the main challenge has been the failure by the government to reimburse the oil marketing firms fuel stabilisation money. Whenever the government subsidises fuel, oil marketers forego the money which they later claim from the government. 

The arrears that the government owes the oil marketers has been on the rise and according to sources this has fuelled a silent protest among the the firms, who decided to withhold products from the market rather than continue selling and waiting lengthy periods for the reimbursements.