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Fuel prices skyrocket as Kenyan government removes subsidy

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The Kenyan government has made bold its plan to remove subsidies on fuel as it has once again partially removed subsidies that cushioned consumers from the global hike in oil prices.

The recently sworn-in president, William Ruto, in his inaugural speech on Tuesday, called fuel and food subsidies “costly and ineffective”.

The energy regulator on Wednesday night revealed it had removed the subsidy for super petrol while retaining a smaller subsidy for diesel and kerosene.

Under the new price regime, petrol – mostly used by private motorists – will now cost about 179 shillings ($1.5) a litre, up from 1.3 dollars while diesel, which is used by transporters and industries will cost about 1.4 dollars in the capital, Nairobi.

The Kenyan government in June announced a plan to remove subsidies on petroleum products since the beginning of this year, fuel has accounted for 20 percent of Kenya’s import bill, with higher prices exposing Kenyans to imported inflation.

Fuel subsidy has been a contentious issue across Africa as its continues to hit a heavy chunk of public revenue and most governments have been reluctant to totally remove it.

In Nigeria for instance, the government in January postponed its planned removal of subsidy on petroleum products till further notice. Petrol subsidy payments reportedly gulped over N1.15 trillion in 2021 alone, resulting in low revenue for federal, state, and local governments to cater to developmental projects.

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Petrol prices fall in South Africa, Libya but cost of diesel keeps flying

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Prices of petrol have fallen in South Africa and Libya but such cannot be said of diesel.

The government of government on Monday announced that the petrol pump price would decrease by up to 1.02 Rand a litre but the price of diesel would increase by up to 15 cents a litre from October 5.

In Sudan also, petrol prices seem to be obeying the law of gravity as the energy ministry said in a statement on Tuesday that price had fallen from 700 Sudanese pounds to 522 pounds ($0.9235) per litre.

There has been a fall in global oil prices recently which has caused a fall in domestic inflation to 7.6% in August in South Africa.

The ongoing war between Russia and Ukraine has had its knock-on effects on oil prices globally. Prices of diesel have almost tripled in most African countries.

In Nigeria for instance, industries like aviationtelecom operators have all struggled with the situation which has disrupted business operations.

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Zambia sets for first meeting with creditors amidst growing fiscal challenges

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The finance ministry in Zambia said it is set for its first meeting with its creditors as the South African country struggles to escape its current financial mess.

The finance minister, Situmbeko Musokotwane made the revelation on Monday at a public meeting to discuss the country’s annual budget.

Musokotwane said at a budget speech last week Zambia’s external public debt reached $14.87 billion at the end of June 2022.

“Have we started negotiations with creditors? Not yet but right now we have preparations for the first meeting,” Musokotwane said in response to a question.

Zambia’s creditors are mainly Chinese lenders and bondholders.

The Southern African country that opted to bow out of a $42.5 million Eurobond repayment in 2020,  is seeking $8.4 billion of debt relief from 2022 to 2025.

Zambia is one of the African countries currently facing economic woes. The country has been in negotiation with the International Monetary Fund (IMF) for aid amidst the crisis.

The country was struggling with a debt burden of almost $32 billion, around 120% of its gross domestic product.

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