Friday, June 2, 2023 – President William Ruto’s bottom-up economics has hit the economy so hard that the Petroleum Outlets Association of Kenya (POAK) has already raised the alarm over the low fuel uptake by motorists in the country.
In a brief statement, the Martin Chomba-led association claimed that the uptake of fuel products had significantly reduced by 25 to 30 percent thanks to Ruto.
According to Chomba, low fuel consumption would hurt petrol station businesses and lead to an economic shrink due to low revenue collection by the government.
“This is how you know Kenyans lack money in their pockets. Petroleum retail is currently down by 25 to 30 percent. This is interesting because even the sale of diesel is down,” the Petroleum Outlets Association of Kenya stated.
POAK attributed the low fuel consumption to several factors, including the high fuel cost, the rising cost of living, and the ongoing economic uncertainty in the country.
It warned that the high fuel cost makes it difficult for motorists to fill up their tanks, while the rising cost of living forces them to cut back on non-essential expenses.
The ongoing socio-political uncertainty is also making people reluctant to spend money.
“It means goods are not being transported across the country. This tells the state of the economy,” the Petroleum Outlets Association of Kenya stated.
While calling for a review of the taxes, believed to prompt motorists to avoid purchasing fuel products, POAK observed that low fuel consumption negatively impacted petrol station businesses that risk closure.
In the proposed Finance Bill 2023, the government proposed increasing Value Added Tax (VAT) on fuel from 8 to 16 percent.
In September 2022, Ruto also removed subsidies on petroleum products after it became apparent that the scheme benefited a few businessmen at the nation’s expense.
Speaking on the issue, Economist Professor X.N. Iraki warned Ruto to take urgent steps to address the low fuel consumption and create an environment conducive to economic growth.
He cautioned that low fuel consumption could devastate the Kenyan economy if the government does not take action.
Professor Iraki’s sentiments were supported by Economist Churchill Oguttu, who stated that a 25 to 30 percent reduction in consumption was almost unlikely and would seriously impact the national economy.
The Kenyan DAILY POST.
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