Kenya’s fuel crisis threatens a shutdown of the economy

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Kenya has been hit hard by an unprecedented fuel shortage that is threatening to grind the country’s economy to a halt.

The crisis has seen a number of oil marketing stations shut down, tens of travelers and motorists stranded, prices of goods going up across the country and public transport vehicles grounded.

Thousands of jobs and businesses are at stake as citizens feel the pinch of the shortage that has lasted for about a week.

Andrew Kamau, the principal secretary of the Ministry of Petroleum and Mining, attributed the crisis to the delay in the payment of 13 billion shillings (about 112.95 million U.S. dollars) subsidy funds to oil marketers by the government. “This crisis is about the money owed to oil companies by the government, which will be paid this week,” he told journalists in Nairobi, Kenya’s capital, Sunday.

Kenya introduced a fuel subsidy scheme on April 14, 2021, that sees the government dealers a certain percentage of fuel costs to cushion the public and stabilize the market. The subsidy was effected as part of efforts to bring down the high cost of basic items.

It has helped to keep the prices of gas, kerosene and diesel in the past year stable, with a liter of gas and diesel in the capital Nairobi having risen by 4 U.S. cents in March after four months of remaining unchanged to stand at 1.17 dollars and 1 dollar, respectively. While the actual rise in gas price for instance was 17 cents in March, the government subsidy helped cushion Kenyans.

Joseph Karanja, the chairman of Kenya Independent Petroleum Distributors Association (KIPEDA), said the delay in paying oil marketers has seen many of them with no money to buy new stocks.

“There is no oil for our members to transport to different outlets across Kenya. We have visited many of them since last week and they had no fuel. The crisis is getting worse by the day,” he said in a recent interview.

The fuel crisis has come at the worst time for Kenyans when many are grappling with rising inflation as prices of basic commodities like cooking oil, bread and milk hit the roof.

Moses Kamau, a taxi driver, said Monday that the taxi sector is among the worst affected, as drivers have to hop from one fuel station to another in search of the commodity. And even when they find it at the selected stations, they have to endure long queues, with some stretching for kilometers, which are eating up into their work time and they are only allowed to buy specific liters.

With Kenya’s economy being fuel-driven, the crisis portends bad times for citizens.

The World Bank and the National Treasury project the country’s economy would grow by at least 5 percent boosted by recovering economic activities as COVID-19 effects wane locally and globally.

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