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State pays dealers Sh1.4 billion for frozen oil prices

fuel

Petrol prices have been on an sharp increase since Januar 2021 . FILE PHOTO | NMG

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Summary

  • The revelations are contained in the Supplementary budget for the year ending this month that was tabled in Parliament.
  • The State froze prices for petrol, diesel, and kerosene in the price review for April 15 to May 14.
  • The margins for petrol were fully restored to the normal Sh12.39 per litre but those for diesel were partially reinstated to Sh11.72 a litre from the normal Sh12.36.

Oil marketers were paid Sh1.43 billion as compensation for keeping fuel prices unchanged to defuse public outrage over a monthly review that would have pushed costs to a historic high, the Treasury has revealed.

The revelations are contained in the Supplementary budget for the year ending this month that was tabled in Parliament.

The State froze prices for petrol, diesel, and kerosene in the price review for April 15 to May 14. The margins for petrol were fully restored to the normal Sh12.39 per litre but those for diesel were partially reinstated to Sh11.72 a litre from the normal Sh12.36.

The move to keep the prices unchanged for the first time since the State started making the monthly price reviews was meant to curb growing public anger due to the effect of the fuel price increments on the economy.

“Additional expenditure is to cater for fuel price stabilisation,” Treasury Secretary Ukur Yatani says in the report to Parliament.

The price of petrol had hit a nine-year high while diesel sold at the highest level since December 2018.

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