Fuel consumption between January and June dropped to the lowest levels in more than five years, excluding the Covid-19 pandemic period, amid high pump prices that depressed demand and pushed the middle class to keep their cars at home.
Official data show that consumption of super petrol dropped five percent to 1.01 billion litres from 1.074 billion litres last year while that of diesel fell four percent to 1.31 billion litres compared to 1.36 billion in the same period.
This is the lowest consumption of the two fuels in five years, excluding 2020 when restrictions imposed to curb the spread of the coronavirus led to reduced demand from the transport and manufacturing sectors.
The drop is likely to impact the growth of the country’s gross domestic product since fuel consumption is one of the major drivers of the economy.
Consumption is expected to dip even further in the second half of this year when the impact of the doubling of Value Added Tax (VAT) on fuel to 16 percent and discontinuation of the price stabilisation scheme that has since sent pump prices to historic highs is captured.
“We are dealing with several governments and the suppliers of these products. We are likely to be going to even harder times,” Energy Cabinet Secretary Davis Chirchir said last month.
A litre of super petrol is currently retailing at Sh211.64 in Nairobi while that of diesel is going for Sh200.99 following the last pricing review in mid-September, with the government warning of even higher costs in the coming months.
Consumers had been grappling with costly fuel even before the record-high prices announced two weeks ago after the State started a phased withdrawal of a subsidy scheme that was used to cushion Kenyans for two years.
In the monthly pricing review that kicked in from March 14, a litre of super petrol rose to Sh179.30 from Sh177.30 the previous month.
Prices of diesel jumped to Sh168.40 in that monthly cycle from Sh162 the previous month, hitting consumers in Kenya’s largely diesel-run economy.