Soon after new government took power in September 2022, it removed subsidies on consumer products including pump fuel, stating subsidies on consumption economy were not sustainable and never benefited the larger economy by keeping prices down.
Instead, government stated, subsidies were to be provided to the production economy.
The Al Jazeera reported in a story titled,’Kenya’s new president scraps petrol subsidy,’ on September 15, 2022, that: “Kenya has scrapped a subsidy on petrol a day after new President William Ruto said subsidies were unsustainable, in a move that could add to upward pressure on inflation.”
Analysts predicted a push to inflation which by August 2022 was at 8.5 per cent, with Al Jazeera further reporting that policymakers had warned the move could empty the country’s coffers, especially due to debts inherited from the previous government.
Shortly after, the Energy and Petroleum Regulatory Authority (EPRA) increased pump prices for petrol, diesel, and kerosene by 13 per cent, 18 per cent and 16 per cent respectively.
The move was met with public outcry, and Reuters reported in the story, ‘Kenya reinstates small fuel subsidy in government U-turn’, published on August 15, 2023, that removal of fuel and maize flour subsidies had led to increased living costs and contributed to violent anti-government protests.
Journalists should report deeply on how the removal of subsidies, including uncertainty in fuel pricing, has impacted on the nation’s economy.
Media should uncover the economic performance so far experienced across different sectors since the removal of subsidies.
Journalists should analyse different sectors, and what it means for them, more so regarding the unsteady application of the fuel subsidy from time to time.
The Business Daily in its May 2, 2024 story titled, ‘State cuts fuel subsidy by half starting July,’ reported that after subsidy helped reduce petroleum prices, the National Treasury in the financial year starting July, had cut fuel subsidy allocation by half, from Sh27bn to Sh54.18bn. In July 2025, Epra increased the fuel pump price.
‘More pain as Epra increases fuel prices,’ reported Nation newspaper on July 14, 2025, explaining that fuel prices per litre had increased as follows: Super petrol at Sh8.99, diesel Sh8.67, and kerosene, used as domestic fuel, at Sh9.65.
Journalists should talk to financial and economic experts on the effects of subsidies being injected on and off into the economy.
According to the Kenya Institute for Public Policy Research and Analysis (Kippra), subsidies can be an effective policy tool to address market imperfections, where competitive private markets fall short in delivering socially beneficial outcomes.
Kippra states on its website that the economic rationale for government subsidies can be categorised into three primary areas. These are: correcting market imperfections to enhance efficiency, achieving economies of scale in production especially for domestic firms to overcome initial competitive disadvantages, and addressing social policy goals such as supporting low-income individuals, redistributing income, and promoting employment.
“In 2009, the government introduced urban food subsidy programme in response to a prolonged drought and effects of post-election violence that led to increase in prices of basic commodities such as maize,” Kippra says.
The Kenya Association of Manufacturers is on record stating that subsidies can be unsustainable in the long run, and can distort markets, but in replacing them the country needs to first have a gradual and well-planned transition, with measures like reducing fuel taxes to offset the removal of subsidies.
In its story, ’34 plant shutdowns reveal Kenya manufacturing woes,’ on October 12, 2023, Business Daily wrote: “More than 30 manufacturing companies have shut down production plants in Kenya in under a decade, revealing impact of uncompetitive tax and business environment, and cheaper imports on the local industry.”
Media should seek expert data on economic production losses suffered by the country as a result of these closures, and job opportunity redundancy.
