The World Briefly

August 17, 2023

A Heavy Load

Kenya

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Kenya reinstated a small subsidy to help control the retail prices of fuel, reversing a government policy that prompted mass protests across the country over the high cost of living, Al Jazeera reported this week.

After taking office in September, President William Ruto removed subsidies on fuel and maize flour that were put in place by his predecessor. He explained that the move would support the production of goods rather than just consumption.

This decision would also help reduce government spending, he said: The African nation is handling debt repayments that have forced it to deny speculation about a possible default.

However, the removal of subsidies and tax hikes caused the cost of living to skyrocket, which culminated in months-long violent anti-government protests.

On Monday, the country’s energy and fuel regulator announced that the maximum retail price would remain at $1.35 for one liter of petrol (0.26 gallons). Consumers would also be shielded from a $0.05 increase, which the government will cover using a special stabilization fund.

Officials did not explain the reasons behind the government’s decision.

Fuel prices in Kenya shot up in July after the government pushed for a law through parliament that doubled the fuel tax.

But last month, the planned protests against that law were canceled after the opposition and Ruto agreed to talks to resolve their differences – the second such attempt this year.

It’s likely that the opposition will take the government to court to invalidate the July law.

This story originally appeared in the August 17, 2023 newsletter, Taming Through Terror.