Siaya Governor James Orengo has strongly condemned the recent surge in fuel prices, warning that the increase will have far-reaching consequences on Kenya’s economy and the livelihoods of ordinary citizens.

Speaking on the matter at a Kisumu hotel on April 15th, Orengo expressed deep concern over what he termed an unjustified rise of more than 25 per cent in oil prices, arguing that global market trends do not support such a sharp increment.

He suggested that the spike points to underlying issues within the country’s petroleum sector.

“We are very, very much concerned about this phenomenal increase of oil prices of over 25 per cent. Looking at the international oil market, the increase is completely unjustified,” he said.

The governor cautioned that the rise in fuel costs will directly translate into higher production expenses across key sectors, ultimately slowing economic growth.

According to him, industries reliant on fuel, including manufacturing, transport, and water services, will bear the brunt of the increase.

“What it means is that the cost of production is going to be higher. That means the economy is not going to grow. Growth is going to slow down,” Orengo stated.

He further noted that the impact will be felt by ordinary Kenyans in their daily lives, particularly those who rely on public transport or own private vehicles.

“Even simple activities will become more expensive. The ripple effect of fuel costs touches virtually every sector of the economy,” he said.

Orengo also linked the price hike to unresolved concerns surrounding a controversial petroleum consignment allegedly brought into the country.

Opaqueness, importation, opaqueness

He claimed that the matter remains unclear despite reports of arrests tied to the scandal.

“It remains unexplained. My understanding is that the consignment is already in the country and has been introduced into the market. Those involved have made their money, but at a great cost to the country,” Orengo said.

The governor alleged that corruption within the oil sector could be contributing to artificially inflated prices, alongside external factors such as instability in the Middle East, and further accused the government of failing to safeguard the interests of citizens.

“We are suffering not just because of global issues, but because of an artificially created cost arising out of corruption in the oil sector. This government is not concerned about the lives and interests of ordinary people.”Orengo said.

In a pointed critique of the current administration, Orengo said leaders must take responsibility and provide clear explanations to the public regarding the price surge.

Orengo dismisses VAT

On proposed mitigation measures, Orengo dismissed the current Value Added Tax (VAT) rate of 13 per cent on fuel as insufficient to ease the burden on consumers. Instead, he called for a more aggressive reduction.

“At one time VAT was at eight per cent. Given the current burden, it should be reduced to a maximum of six per cent,” he said.

He further proposed zero-rating VAT in select sectors to stimulate economic activity and enhance competitiveness, noting that Kenya operates in an increasingly challenging global production environment.

“We are in a very competitive space as far as economic production is concerned,” Orengo said, urging policymakers to adopt measures that would support growth rather than stifle it.