President William Ruto speaks at the Embu Stadium during the country’s 60th Madaraka Day celebrations on June 1, 2023.
National News

President Ruto Explores Electric PSVs to Tackle Soaring Transport Costs

President Ruto expressed the government’s intention to start using electric public service vehicles as a means to mitigate the rising transportation expenses caused by the global surge in petroleum prices.

Speaking during the 60th Madaraka Day Celebrations at Moi Stadium, Embu County, the president emphasized the importance of reducing the dependence on diesel and petrol in Kenya’s efforts to address the escalating costs of transportation.

“As international petroleum prices continue to rise beyond reach, the cost of fuel locally rises steeply. Transport, as a component of household budgets, is affecting the cost of living. We have to liberate Kenyans from reliance on transport that depends on petroleum. For this reason, we are rolling out an electric vehicle public transport system which will bring down the cost of transport significantly,” he said.

The government’s focus on promoting environmentally-friendly transportation extends to various sectors, including the boda boda industry. The Head of State noted that this industry holds significant potential for the implementation of green vehicles in the government’s plan.

“Our boda boda industry is about to experience inclusive transformation through the introduction of more efficient, affordable and clean vehicles. With this intervention, owning and operating a boda boda will become affordable, secure and profitable, ” Ruto said.

Fuel prices have reached unprecedented levels following the removal of a subsidy by President Ruto’s administration. This has led to increased manufacturing costs, further exacerbating the situation.

Currently, in Nairobi, a liter of super petrol is priced at Ksh. 182.70 while diesel stands at Ksh. 168.40. Unless there is a decline in gloabl crude prices, the situation is likely to worsen in the upcoming months.

Adding to the challenges, there is a proposal under the Finance Bill 2023 to double the Value Added Tax on petroleum products from eight percent to 16 percent. If adopted by Parliament, the move will contribute to even higher fuel prices.

President Ruto defended the proposal, citing recommendations from his economic advisory team, with the intention of generating Ksh. 50 billion for the government.

“This 8 percent we are adding will give us about 50 billion shillings and begin to deal with the problem of roads in our country, but to balance it out, I have removed on the same fuel, 3.5% road development levy, 2 per cent of IDF, and removed 8% VAT on gas,” President Ruto said in a joint media interview statement from State House, Nairobi, on May 14.