To reduce escalating transportation costs, Ruto said Kenya would introduce electric PSVs.

by Francis Ogoti
2 minutes read

In light of the global rise in gasoline prices, President William Ruto announced on Thursday that the government is looking into electric public service vehicles (PSVs) to reduce transportation costs.

Speaking at the Embu Stadium during the nation’s 60th Madaraka Day festivities, Ruto stressed the importance of lowering Kenya’s reliance on diesel and gasoline in order to address the country’s rising transportation costs.

“The cost of fuel in my area is rising sharply as international petroleum prices continue to increase above my ability to pay. The cost of living is being impacted by transportation as a cost of living item for households. We must free Kenyans from their reliance on petroleum-based transportation. We are launching a public transportation system for electric vehicles as a result, which will dramatically reduce transportation costs, he said.

The Head of State specifically mentioned the boda boda (motorcycle taxi) industry as one of the key sectors where the government intends to introduce green cars.

“Through the introduction of more effective, cost-effective, and environmentally friendly vehicles, our boda boda business is about to undergo an inclusive transition. Owning and running a boda boda would be more economical, secure, and profitable thanks to this intervention, said Ruto.

Fuel prices are currently at an all-time high after Ruto’s administration eliminated a subsidy that had been in effect since April 2021. This has in turn caused a spike in the cost of living due to higher manufacturing expenses.

Nairobi’s retail prices for a litre of super gasoline are Ksh. 182.70, while those for diesel are Ksh. 168.40. If global crude oil prices do not decrease in the upcoming months, the situation is predicted to get worse.

Additionally, the Finance Bill 2023 includes a proposal to raise the Value Added Tax on petroleum goods from 8% to 16%.

Even while President Ruto insists his economic advisory team recommended the action in an effort to offer the government Ksh. 50 billion, the law, if accepted by Parliament, will significantly increase fuel costs.

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

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