Why the price of petrol was never hiked during budget reading

National treasury CS Ukur Yatani

By The Weekly Vision

Kenyans wore down by the rising cost of living were saved from further shocks when the government failed to agree with a proposal from the IMF who had advised for the doubling of VAT on all petroleum products just before the 2020/2021 budget were read.

According to sources within the national treasury who spoke to The Weekly Vision on condition of anonymity, the IMF had demanded the imposition of tax doubled on fuel in the Budget.

The heavily indebted government of President Uhuru Kenyatta is said to have flatly refused to concede to the IMF plan to double VAT on fuel as the only sure way of raising funds for recurrent costs and external debt settlement

At a meeting chaired by President Uhuru Kenyatta at State House in Nairobi which stretched into the night, the government is said to have resolved that such a move would have triggered some angry protests from wananchi already weighed down by the high costs of living. So far this year alone fuel costs have been raised 4 times.


The move would have triggered civil unrest, according to a government think tank familiar with the budget formulation in Nairobi. The heavily indebted government of President Uhuru Kenyatta is said to have flatly refused to concede to the IMF plan to double VAT on fuel as the only sure way of raising funds for recurrent costs and external debt settlement.

Kenyatta and interior CS Fred Matiangi are further said to have listened keenly to security intelligence on the situation on the ground and agreed to shelve any plan to hike or impose any tax on petroleum products. The IMF plan, according to State House insiders remains on the “table” with other plans to slash the government workforce and sell off major parastatals that will be merged and privatised.

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