Treasury Cabinet Secretary John Mbadi has dismissed claims linking the International Monetary Fund (IMF) to the recent increase in fuel prices in Kenya, stating that the lender only offers economic advice and does not dictate specific tax measures to the government.

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Speaking on Monday, May 18, amid nationwide protests by transport operators over the recent fuel price increase, Mbadi explained that the IMF’s role is advisory and focused on helping countries manage economic shocks.

According to the CS, suggestions that the Bretton Woods Institution instructed the Kenyan government to raise fuel prices or maintain high taxes are misleading and politically motivated.

“I think people have not understood the IMF and the World Bank. The IMF advises member states on macroeconomic issues during possible economic shocks,” he said.

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“They may recommend that countries prepare for the effects of rising global fuel prices, but they do not tell governments to reduce or increase VAT or introduce specific taxes.”

Mbadi acknowledged the seriousness of the situation facing the country, describing it as dire, but emphasised that Kenya’s policy decisions are only made by the government and not imposed by international financial institutions.

His remarks come after the Energy and Petroleum Regulatory Authority (EPRA) announced significant fuel price increases on May 14, with super petrol rising by Ksh16.65 per litre, while diesel prices increased sharply by Ksh46.29 per litre.

The fuel adjustments triggered widespread criticism from the public, particularly matatu operators who argued that the high diesel prices would increase operational costs and eventually affect passengers through higher fares.

Following protests and pressure from transport operators, the government revised the price, with diesel prices reduced by Ksh10.06 per litre, kerosene prices increased by Ksh38.60 per litre, while petrol prices remained unchanged for the pricing cycle running from May 19 to June 14.

Despite the revision, transport operators rejected the changes, insisting that the reduction in diesel prices was insufficient. They demanded a full Ksh46 reduction per litre to ease the burden on the public transport sector.

📰 Source: Kenyans.co.ke