Two months after the Energy and Petroleum Regulatory Authority (EPRA) raised the Value Added Tax (VAT) on fuel from 8% to 16%, major Kenyan roadways experienced a notable reduction in traffic bottlenecks.
Nairobi drivers claim that compared to a high of two hours, the amount of time spent navigating congested routes like Mombasa and Lang’ata roads at rush hour has decreased by up to 30 minutes.
In an interview with the media, Peter Murima, Chairman of the Motorists Association of Kenya (MAK), linked the decline to the increase in fuel costs earlier last month.
Murima observed that the number of personal automobiles has reduced along the Eldoret-Nakuru Highway; which he frequently travels, with many turning to public service vehicles as high energy prices pinch.
“You can tell that fewer people are using the roadways. Where we are now, there used to be gridlock on this route. I’ve counted the personal cars, and the majority are used to provide necessities,” the chairman said.
”This demonstrates that there is less economic activity and that travel costs have increased; which forces commuters to travel less, which is bad for the transportation industry.”
Before the rise; according to Murima, the nation utilized around 20 million liters of gasoline each month; however, that number has since decreased, drawing the attention of oil marketers.
”We used to use 20 million liters of fuel when the economy was booming, but just now, the consumption is so low that an oil marketers’ report is being prepared,” he continued.
“When sales are strong, government revenue is strong, and when sales are weak, it impacts state revenues. In order to maintain high revenues, it is wise to cut prices through policies.”
In Kenya, the current retail prices for Super Petrol, Diesel, and Kerosene are Ksh194.68, Ksh179.67 and Ksh169.48, respectively.
The group; which has 300,000 members, adopted carpooling as a form of transportation for its members following the price surge.
After the price increase, the 300,000-member association adopted carpooling as a means of transportation for its members, and it is estimated that 30% of them either used PSVs or car-sharing programs.
Murima noted that the state was losing a sizeable portion of its revenue due to the decreased usage. For instance, 70% of matatu profits were used to purchase fuel; which has a liter-level tax of up to 50%.
The chairman of the Matatu Welfare Associations; Dickson Mbugua, confirmed a minor rise in PSV passengers along with his MAK counterpart.
He acknowledged that gasoline prices were a role, even if he did not connect the rise to a decrease in the use of private vehicles. The choice between supporting their families and keeping their vehicles on the road was difficult for the drivers.
“There has been a minor rise. I wouldn’t say there has been a significant movement from private vehicles to matatus, but there has been a small change, which explains why traffic bottlenecks no longer last for extended periods of time. Even the cost of living has an impact on drivers since they must choose between driving and providing for their families,” he said.
“A slight increase in matatu revenues has resulted in an influx of matatus.” A rise in consumers and an increase in rates are said to be responsible for the industry’s revenues rising by 10%.
by: Mediawriter