Fuel Subsidy Gets Ksh.38 Billion In Second Supplementary Budget

The fuel price stabilization program by the government, commonly known as the fuel subsidy, has been allocated Ksh.37.8 billion under new proposed changes to the budget.

According to the second 2021/2022 Supplementary Budget estimates tabled in Parliament on Tuesday evening, the new subsidy allocation represents 59 per cent of the proposed Ksh.64 billion increase to spending.

Already, Ksh.15.8 billion of the fuel subsidy kitty has been disbursed to Oil Marketing Companies (OMCs) in March and April under priority spending which is covered under Article 223 of the constitution.

Overall spending by ministries and the national government has been proposed to move up by 3.1 per cent from the 1st approved estimates to Ksh.2.15 trillion from Ksh.2.08 trillion.

Expenditure and net lending is meanwhile expected to move up by a similar margin to Ksh.3.455 trillion from Ksh.3.391 trillion.

Other major gainers of the proposed supplementary budget include the State Department of Infrastructure which is set to gain Ksh.24 billion to finance ongoing road projects.

Already Ksh.1 billion and Ksh.9 billion has been spent prior on the construction of the Naivasha Inland Container Depot and Longonot Station works respectively.

The Executive Office of the President is set to gain Ksh.4.5 billion, Treasury will see a Ksh.3.3 billion top-up while Social Protection will see its allocation move up by Ksh.1.5 billion.

The State Department of Wildlife gains Ksh.1.3 billion, the Teachers Service Commission (TSC) gains Ksh.2.2 billion and University Education gets a Ksh.1.2 billion add-on while Defence receives a Ksh.1.8 billion boost.

Big losers in the proposals include the Energy Ministry which is set to lose Ksh.3.9 billion, Crop Development which loses Ksh.4.8 billion and the Ministry of Health which sees a Ksh.3.8 billion budget cut.

Early Learning and Basic Education also loses Ksh.1.6 billion of its budget allocation in the supplementary proposal.

The additional allocation to the fuel price stabilization framework comes on the backdrop of assurances by the National Treasury of the continued use of the subsidy to caution Kenyans from higher fuel prices.

Presently, the subsidy continues to cushion against otherwise costly fuel prices.

The cost of super petrol in the current pricing cycle to June 13 which stands at Ksh.150.12 in Nairobi would for instance cost Ksh.176.47 without the subsidy.

Diesel and kerosene which currently costs Ksh.131 and Ksh.118.94 would be priced at Ksh.174.94 and Ksh.169.26 respectively.

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