Bottom-up economics, practiced by President William Ruto, have had such a negative impact on the economy that the Petroleum Outlets Association of Kenya (POAK) has already raised concerns about the low rate of fuel use by Kenyan drivers.
The Martin Chomba-led group said in a succinct statement that Ruto was to blame for the major reduction of 25 to 30 percent in the uptake of fuel products.
Chomba claimed that low gasoline use would harm the operations of gas stations and cause the economy to contract since the government would not be able to collect as much money.
“This is how you can tell that Kenyans are short on cash. Retail sales of petroleum are currently falling by 25% to 30%. This is intriguing because, according to the Petroleum Outlets Association of Kenya, even diesel sales are declining.
POAK ascribed the low gasoline usage to a number of elements, including the high cost of fuel, rising living expenses, and the nation’s persistent economic unpredictability.
It warned that although the rising cost of living drives people to make cuts in non-essential spending, the high cost of fuel makes it challenging for drivers to fill up their tanks.
People are also hesitant to spend money due to the current sociopolitical unrest.
It indicates that items are not being moved across the nation. According to the Petroleum Outlets Association of Kenya, this reveals the state of the economy.
POAK demanded a reconsideration of the tariffs, which are thought to discourage drivers from buying fuel-related products, and noted that low fuel usage had a detrimental impact on gas station businesses that were at risk of going out of business.
The government suggested raising the Value Added Tax (VAT) on fuel from 8 to 16 percent in the proposed Finance Bill 2023.
Ruto also eliminated petroleum product subsidies in September 2022 as it became clear that the plan favored a select group of merchants at the expense of the country.
Professor X.N. Iraki, an economist, cautioned Ruto to act quickly to solve the low fuel usage and establish a climate that supports economic growth.
He issued a warning that if the government does nothing, Kenya’s economy could collapse due to low fuel use.
Economist Churchill Oguttu agreed with Professor Iraki’s assertions, saying that a fall in consumption of 25 to 30 percent was highly improbable and would have a negative effect on the country’s economy.
