Shock as Ruto restores price subsidies: Chris Kumekucha analyzes
President William Ruto has been very clear that his government will never go back to "Uhuru's subsidies". So what exactly happened here with fuel prices?
Unexpected Turn of Events
Just when everyone was bracing for an exponential surge in fuel prices, President William Ruto's regime very suddenly made an unexpected move. His decision to restore price subsidies has left many in shock, yet with a sigh of relief. This policy shift is undoubtedly a significant game-changer in the Kenyan economic landscape, primarily affecting the standard of living because it gives at least some little reprieve and "room to breathe."
Ruto's unexpected subsidy was applied to the latest fuel prices announced by the Energy and Petroleum Regulatory Authority (EPRA) on August 14, 2023.
EPRA retained fuel prices at Ksh194.68 for Super, Ksh179.67 for Diesel and Ksh169.48 for Kerosene.
The prices had been expected to shoot to a new high (crossing the Kshs 200 mark per litre of fuel) due to higher international prices and the recently approved 16% Value Added Tax (VAT) on petroleum products a doubling from the previous 8% VAT applied.
Behind the Decision
Many are questioning the timing and motive of this sudden policy change. Is this a strategic move by Ruto to win over the populace? Is there a new advisor behind the scenes pulling the strings to save his presidency? These questions remain unanswered, fostering a sense of uncertainty around the government's future economic policies.
The Future Implications
While Ruto's decision brings immediate relief, but it also raises questions about the government's fiscal sustainability. Subsidies mean a reduction in government revenue, begging the question: How will this lost revenue be replaced? Will this decision impact Kenya's ability to meet its financial obligations?
Only time will tell.
Subsidies are not necessarily bad, but they should be temporary.
- Steven Chu
Political impact
Human nature is a strange thing. A quick survey carried out by this writer confirmed that nobody is going to start loving and supporting Ruto as a result of this welcome change of heart over subsidies. In all liklihood it would seem that that particular train has left the station forever whatever Ruto does next. Even if the price of Unga is announced at Kshs 20 per 2 Kg packet tomorrow.
This is unfortunate because to govern one cannot do without the support and goodwill of those they seek to govern.
Subsidies are a way of buying off opposition and avoiding necessary reforms.
- Joseph Stiglitz
It is like the wife who has been battered by a husband for a long time and has made the decision that enough is enough and then he starts running warm baths for her and treating her like the queen she should be, but alas it is too late.
The Impact of Price Subsidies
For the economists and those looking at this from that angle; Whether you're a homeowner managing household costs, a driver manoeuvring through the hectic Kenyan roads, or a business owner trying to keep operational costs low, the impact of this policy change is far-reaching. The reinstatement of price subsidies means:
1. At the very least a slowing in the very steep rise in cost of living we have been experiencing in Kenya since Ruto and his policies came into power, as the prices of goods and services linked to fuel prices are expected to hold steady. Or not to increase the way they would have had the price of a litre of fuel crossed the Kshs 200 mark.
2. Less severe pressure on households and businesses amidst the economic repercussions of the ongoing economic depression.
3. More breathing-space-disposable income for the average Kenyan citizen, potentially nudging economy to see if it there are any signs of life left there. Don't miss: Why Ruto ate humble pie and re-introduced Uhuru's subsidies he had sworn against
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Flashback to 2013 politics in Kenya reveals the true character of Prof Mutahi Ngunyi as Kenyans continue to be disturbed by his recent switch from Azimio to the Ruto camp
The Role of Prof Mutahi Ngunyi
Against this backdrop of innovative campaign strategy, enters Prof Mutahi Ngunyi. A renowned political scientist and analyst, Ngunyi was already known for his incise analysis and thought-provoking ideas. But it was his involvement in the 2013 campaign that would cement his place in the annals of Kenyan politics. Don't miss; Prof Mutahi Ngunyi secrets to fix Raila in new Ruto partnership
This is an excerpt from Chris Kumekucha's latest fascinating eBook; Tyranny of false narratives. Grab your copy now and also get 2 months free membership to Kumekucha's Weekly Intelligence Briefings. Mpesa Kshs 499 to 0701 333112 (goes to my assistant Carol Peter) or Paypal $4.99 to umissedthis at gmail dot com. Kindly remember to text your email address after making payment.
See also; Twitter In Kenya Fully "Controlled" By Itumbi And Fake Social Media Accounts (From India)
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Mandago finds himself in a vulnerable position due to his love-hate relationship with Ruto in the past opening the possibility of the president succumbing to pressure and throwing him under the bus. Read full article: Mercy Tarus and Uasin Gishu Finland scholarships scam: Political reason why justice will NOT be forthcoming easily
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