Kiharu MP Ndindi Nyoro has tabled a series of proposals before the Departmental Committee on Finance and National Planning aimed at shielding citizens from rising living costs, largely driven by increasing fuel prices.

The lawmaker argued for strong short-term fiscal interventions to address what he described as a temporary disturbance in the market, warning that its effects could become entrenched in the economy if not managed early.

He noted that the current disruption in fuel supply chains, linked to ongoing conflict in the Middle East, may not persist for long, but stressed the importance of implementing corrective measures for a period of at least six months to help stabilise inflation.

“The current disruption in fuel prices is not likely to last long; however, the policy decisions taken now are likely to have long-term implications on the economy. The trade-off is between what we may spend now and what the economy may lose in the medium to long term”, the lawmaker observed.

He further cautioned that increases in the cost of goods and services driven by higher fuel prices tend to persist even after fuel prices stabilise. “The rising prices of goods and services associated with the rising fuel prices will likely be sticky. For instance, once public transport fares rise, they rarely revert to previous levels”, Hon. Nyoro added.

Nyoro’s proposed fuel relief measures

In a submission to Parliament dated May 15, Nyoro proposed a reduction of the Road Maintenance Levy Fund by Ksh7 per litre through revocation of the 2024 order that raised the levy from Ksh18 to Ksh25.

He also proposed amendments to the VAT Act to exempt petroleum products fully, lowering VAT from 8 per cent to zero. Additional measures include capping importer and distributor margins, currently reported at Ksh17.39 for super petrol and Ksh17.31 for diesel, as well as allocating an additional Ksh5 billion subsidy to support petrol prices.

Nyoro stated that the combined interventions could reduce diesel prices by approximately Ksh54 per litre, aiming to ease pressure on transport costs, food prices, and household budgets. The proposals are set for consideration by the parliamentary committee as part of broader fiscal discussions on fuel pricing structures.

Fuel price hikes and transport sector response

The proposals come shortly after the Energy and Petroleum Regulatory Authority (EPRA) announced fuel price increases on May 14, which pushed diesel to Ksh242.92 per litre before a subsequent reduction of Ksh10 to Ksh232.86.

The adjustments triggered disruptions in several regions, including matatu strikes, road blockades in Kitengela, and public demonstrations.

Following consultations involving President William Ruto in Mombasa on May 22, the initial strike was suspended. However, the Matatu Workers Union (MWU) and Long Distance Drivers and Conductors Association (LODCA) have since raised concerns over wages and working conditions, warning of possible renewed industrial action.

Transport operators have cited rising fuel costs as a key pressure point affecting operations.

Fiscal debate and international policy position

The fuel relief debate has extended to broader fiscal and policy considerations, including government expenditure and subsidies. Senator Kiprotich Arap Cherargei questioned the structure of state support to Kenya Airways, citing repeated bailouts and debt restructuring arrangements.

At the international level, the International Monetary Fund Managing Director Kristalina Georgieva cautioned against broad fuel subsidies, noting that they can distort markets and strain public finances. She advocated for targeted cash transfers to vulnerable households and price adjustments aligned with global market conditions.

Parliamentary deliberations on Nyoro’s proposal are expected to influence Kenya’s approach to fuel pricing, balancing immediate relief measures with long-term fiscal sustainability as global oil market dynamics continue to fluctuate.