CS Mbadi Struggles to answer the Question on why Fuel is Higher in Kenya than Uganda!

Added: 2026-05-23

[00:00:00]prices of fuel across the East African region.

[00:00:03]>> changed I changed anything at all. I am still the same gentleman who was in parliament, who was even before parliament was advocating for good governance. I still believe in good governance and we demand for good governance. What is different is that I think since the world was created, there's no time that Strait of Hormuz has ever been blocked.

[00:00:26]This is the first time that that that place is a scenario uh corridor, but that is where 20 20% of world's oil comes from or comes from.

[00:00:40]Further, for Africa, the bulk of the petroleum products that we consume, the fuel that we use, come through that Strait of Hormuz.

[00:00:49]And so, any challenge to that corridor affects our prices uh automatically. And I will tell you for the first part, the major oil marketing companies that use or have been supplying us with oil have to source for oil elsewhere, far places, not where they were the traditional sources. And that is why you'll find that on 28th of February 2026, when Trump announced that the war had begun with Iran, the price per metric ton of diesel was 642 US dollars.

[00:01:29]Today, it is at 1,120 uh US dollars per metric ton.

[00:01:37]That is over 80% increase in what they call the flat price or index price of oil or of fuel.

[00:01:47]Now, that automatically builds into the price at the local stage.

[00:01:52]So, that is what has hit us hard. And I will tell you, some countries, it is not even about the price. It's not even about the cost. In some countries, it is about availability.

[00:02:06]There are countries that cannot even access.

[00:02:09]In fact, some countries have advised their citizens to be working from home to save on fuel.

[00:02:17]There are countries where you they ration.

[00:02:20]That has not hit Kenya. At least for now, we have because of the programs and the plans that we had, at least we have availability of fuel.

[00:02:29]We have guaranteed availability of fuel.

[00:02:32]Now, what is the challenge is the price.

[00:02:35]And the only way to deal with price of fuel in Kenya is two things. Number one, the price of fuel is determined interna- There is an international way of calculating the price of fuel.

[00:02:50]The only thing you can do is to subsidize as a country.

[00:02:55]Or, at the extreme cases, in the extreme, you can start reducing certain taxes and levies that are added onto the landing cost of fuel.

[00:03:07]Now, what have we done as a government?

[00:03:10]In terms of subsidy, we have done the best that we could because before this crisis, we had 17 billion that we had built into the fund stabilization fund.

[00:03:23]Out of that, it was 16.7 or thereabout.

[00:03:26]Out of that amount, the first month when we were hit, because you see, we were consuming the stock.

[00:03:34]After the war, we consumed the stock of February and March, which had already been ordered at that old price, which was cheap. So, when the new prices started hitting us in April, we moved to cushion Kenyans by applying 6.2 billion. Of course, we could not apply the entire amount because we didn't know for how long this war would last. So, we applied 6.2 billion to cushion and reduce prices.

[00:04:02]Now, apart from that, as a government, we decided to reduce VAT. Initially, I announced a reduction as CS National Treasury to 13% because that is what the law allows me. But the president realized that we needed to go a step further. And now proposed that we go all the way to 8%. That I could not do because the law only allows the CS to do up to 25% of the rate, which could have not taken us below 12%. So, Parliament was called upon to apply their responsibility and reduce value added tax from 16% to 8%. Of course, with consequences, and I'll come back to that later. Now, come the month of May, the prices even shot higher in the international state.

[00:04:51]Beyond even what we had anticipated in the month of April. So, what did we do?

[00:04:56]We again applied because now we were remaining with just about close to 11 billion in that kitty. We applied another 5 billion as because we we still have another 1 month or at at least another one round or another one cycle of price price announcement. So, we applied another 5 billion.

[00:05:15]That 5 billion that we applied, we specifically targeted diesel.

[00:05:21]Because diesel is the most consumed in our economy.

[00:05:26]So, we applied 4.5 billion to diesel to cushion to subsidize it.

[00:05:30]500 to kerosene, and petrol we did not even subsidize.

[00:05:35]Now, what happened is that after doing that, still the prices are to go up because the subsidy was not enough. It was not enough. It was not enough. Yes, but now, you know, So, after just maybe give me a minute. So, after the discussion that we had with the matatu the representative of the matatu sector and all that discussion we had on Monday and Tuesday. We then agreed that the remaining 5 billion that is in the kitty, we could use again another 2.7 billion to cushion further diesel. That is why you had the announcement that was made yesterday.

[00:06:10]So, the government is doing everything that we can to make sure that the prices of petroleum products or fuel comes down uh so that we cushion North Kenyans to cushion our economy. Because rising prices means rising inflation.

[00:06:27]All right. And you know, we now have a period of 1 week before the matatu owners decide to go back to the streets or not, depending on the deliberations that you're having. And people are wondering um on Monday you said the fuel prices will remain unchanged until the next pricing cycle. Now, we're looking at 1 week. Can you make it make sense?

[00:06:49]What are we really looking at? Can the prices change?

[00:06:54]First of all, there are concerns over these players in this industry. You know the business.

[00:07:00]One of the issues they have is the issue of adulteration.

[00:07:04]Actually, to them that is number one.

[00:07:06]Because when you leave the kerosene prices way behind diesel prices, uh then you run the risk of adulterated uh fuel. And that would have a knock effect on their engines. That is their biggest concern.

[00:07:23]So, that we are trying to address. And you saw now the government is trying to push the prices of kerosene to be as close as possible to diesel.

[00:07:32]And also taking other measures. We are They're being The measures are being discussed on how the government can make sure that there is no adulteration. So, that is number one. That is being discussed. In the one week, I think we should be able to come to an agreement. Then, number two is a pricing. Even if it is not going to kick in immediately, we have another round where another cycle where the prices will be announced. Today is 20th.

[00:08:00]Tomorrow is 21st. The next announcement will be on 14th. So, we are discussing not with a just solution for today. It is solution for today, tomorrow, and the days to come.

[00:08:14]All right. That the fuel prices is really a touching question for everyone here. And my co-host, Brian Furaha, is hanging out somewhere in the audience.

[00:08:24]And as well as Josh Onsare, perhaps we could get views from your side. Any questions, comments, uh Brian? Over to you.

[00:08:37]Hello. How was it?

[00:08:38]Yes. Uh for the co-