Prices of fuel will fall soon, say Gachagua
Deputy President Rigathi Gachagua says fuel prices will come down before the end of the year despite going up by the highest margin last week. Although he ruled out any subsidy, he said experts in government had informed them the prices would fall in the next three months.
Speaking during an interview with ‘KTN News’, Gachagua — who was sworn in alongside President William Ruto a week ago — said the focus would be on long-term solutions to the challenges facing Kenyans.
“From the trends we have seen, we expect the fuel prices to go down by December ... from our analysis and what the experts have told us,” he said on Sunday.
The new administration has come under accusations from critics, just a week after taking over, for scrapping fuel subsidies that had kept prices within manageable levels. The move saw the cost of the commodity shoot up by over Sh20 per litre.
During the inauguration last week Tuesday, President Ruto said it would not be prudent to continue allocating billions of shillings to a programme wouldn’t be sustainable in the long-run.
Gachagua asked Kenyans to bear with them, saying they had inherited a dilapidated economy that would need time to reinvigorate.
“The pain will be short-lived. The prices of fuel will come down before the end of the year. If it doesn’t come down, the reduced cost of agricultural production will leave farmers with more money to spend,” he said.
The new prices have already had a ripple effect as travellers are paying more for fare. The cost of power has also gone up, with Kenya Power still levying customers for fuel used to generate electricity in some regions.
Prices of food might also begin rising this week as manufacturers pass the extra cost to the customers.
Gachagua said it would be foolhardy to continue acquiring more debt to finance short-term projects consuming billions of shillings.
“When you are in a hole, the first thing you do is stop digging and figure out how to get out. You cannot continue digging. We have a 10 trillion debt, you cannot borrow to subsidize consumption because that is digging the hole deeper,” the DP said.
He said their focus would be on easing the pain of farmers with the belief cheaper farm inputs will translate to affordable products.
“We don’t want quick fixes. We need a sustainable solution, subsidizing consumption is not sustainable, you cannot borrow money to subsidise consumption,” he said.
The week-old government might also be considering issuing a bond to get money to pay over Sh500 billion in pending bills although that would go against Kenya Kwanza’s promise to avoid immersing the country in more debt.
Gachagua said offsetting the bills will ensure higher circulation of money in the economy and improve the purchasing power of suffering Kenyans.
“We are working with the Treasury to see if we can raise a bond to pay pending bills. If we succeed, and I think we will succeed, we will pay the bills and this will be like an economic stimulus intervention as money will circulate in the economy,” he said.
As they rack their brains on how to stabilize the economy, Ruto and his deputy are also constituting their Cabinet which will help them to run the government.
A number of probable names, including senior politicians, have been circulated but the DP said they were taking time to pick the right persons for the dockets.
He said they would put in consideration factors such as experience, commitment, gender and regional balance in forming it.
“We will have a Cabinet that has the capacity to deliver, the various placements to be done will be rationalized. There will be a nexus between the appointee and the docket,” he said.
Gachagua also said Ruto will stick to his promise to hand over half of the Cabinet slots to women.
He also defended the planned appointment of politicians to the organ.
“There are politicians who have the capacity to work. They are not bad people as has been claimed. Let us not criminalise politicians, there is nothing wrong with having politicians in the Cabinet,” he added.