- EPRA announced the increase in the price of oil in Nairobi, where petrol and diesel exceeded KSh 200 per liter due to the increase in the cost of oil in the world and transportation, especially the tension in the Middle East
- The government has defended the action explaining that it has set a subsidy of KSh 6.5 billion, reduced VAT from 16% to 13%, and used the G-to-G system to prevent greater increases for citizens
- However, critics, led by political debates including the views of Rigathi Gachagua, continue to question the transparency of G-to-G and the effectiveness of these strategies in reducing the cost of living
The Government-to-Government (G-to-G) fuel procurement system has continued to be the center of great debate in Kenya, especially at a time when citizens are facing the burden of the cost of living and rising fuel prices in the market.
Source: Facebook
What is G to G then and why has it attracted debate in Kenya
This system began to be used in 2023 under the President’s Government William Ruto through the Ministry of Energy as an emergency measure to deal with the challenges of the global oil market, the shortage of foreign dollars, and the effects of international conflicts, especially the wars in the Middle East and Eastern Europe.
The government explained that G-to-G aims to ensure that Kenya gets fuel reliably, with long-term payment terms, thereby reducing disruptions in access to this important product.
However, the debate has increased due to the rise in oil prices and allegations of uncertainty in the supply and procurement system.
Ruto’s statement on fuel prices and G-to-G
After EPRA announced a sharp increase in fuel prices where petrol and diesel exceeded KSh 200 per litre, President William Ruto defended the government saying the measures taken were aimed at preventing prices from rising further.
Speaking at a public meeting in Kisii, he said:
“We have a problem in the Middle East, the G to G program has made Kenya a competitive place for oil… we have made sure that we have subsidized oil so that the high cost does not reach the common man.”
Ruto emphasized that the world is facing oil challenges, but Kenya is in a better situation compared to some countries suffering from oil shortages.
He also said:
“We have set aside KSh 6.5 billion to support fuel subsidies, and we have reduced VAT to reduce the burden on the people. We do not want the people to bear the burden of fuel prices.”
According to the government, VAT was reduced from 16% to 13%, and fuel subsidies were provided—including KSh 20.30 per liter for diesel and KSh 4.92 for petrol, while kerosene remained regulated to remain stable.
Gachagua’s statement and discussion about this system
In a broad political debate about the cost of living and the oil industry, former Vice President Rigathi Gachagua he has been associated with criticism of the government’s economic policies, especially those that directly affect ordinary citizens.
Gachagua has been stressing several times that citizens bear the burden of the cost of living, warning that some economic policies may increase the pressure on ordinary households instead of reducing it.
Although he was not directly linked to the G-to-G system in the government’s statement, his role in the political debate has been to highlight the broader issue of rising oil prices, taxes, and the effectiveness of subsidies, while encouraging greater transparency and accountability in the use of public funds.
How the people will react
The rise in oil prices has directly affected the people:
- Transportation fares
- The price of food
- Industrial production costs
- Inflation in general
Many continue to wonder if the subsidy and the G-to-G system have really reduced their burden as intended.
The G-to-G system is still an important pillar of Kenya’s oil policy, but it has entered a difficult period of criticism and evaluation.
While the government insists that it has brought stability and ensured access to oil, citizens and industry experts continue to question its transparency, real costs, and effectiveness in reducing the price of oil in the market.
Its future now depends on how the government will address the issues of transparency, competition, and trust in the energy sector.
Source: TUKO.co.ke
