Middle class keeping their cars at home as fuel price escalates
By Wanja Waweru
Kenya’s fuel usage has decreased for the first time since 2017, with the exception of the pandemic year, indicating a slowing economy in the midst of record-high pricing and decreased vehicle sales by formal dealers.
According to preliminary official figures, the intake of diesel—which is primarily used to power commercial vehicles as well as agricultural and industrial machinery—fell to 2.27 million tonnes from 2.29 million tonnes.
According to data from the Kenya National Bureau of Statistics, consumption of Super gasoline, which is primarily used by owners of personal vehicles, decreased more quickly than expected to 1.508 million tonnes from 1.544 million tonnes the previous year, indicating a decline in the use of personal vehicles.
In Nairobi, the average retail price of a litre of diesel increased by 32.18 percent to Sh144.38 over the course of a year, while the price of a litre of super petrol increased by 23.90 percent to Sh154.77.
With more cars on Kenyan highways, fuel consumption has consistently increased year over year, with the exception of the Covid-19 era, when consumption fell before rising again as the economy began to recover.
Fuel retail prices reached record highs as a result of unstable global oil markets, which were partly brought on by Russia’s conflict in Ukraine and worsened by the pandemic shocks of 2020.
According to the KNBS, supply chain constraints caused Kenya’s cost of fuel importation to increase 72.13 percent to Sh656.62 billion last year.
The previous administration spent Sh81 billion in the fiscal year that ended in June 2022 to protect consumers from the rising cost of the basic good, which serves as the primary driver of activity in important sectors including farming and transportation.
President William Ruto’s regime, however, dropped the cushion on Super petrol from last September immediately after taking power, citing the high cost of the fuel subsidy that the cash-strapped government could not sustain.
The reduced uptake of fuel reflects a slowdown in economic activity last year because of a prolonged severe drought, elevated inflationary pressure and higher interest rates that hurt spending and investment by Kenya’s families and businesses.