Commuters will continue to pay higher fares despite a Sh5 reduction in the price of diesel – mostly used by Public Service Vehicles – with operators ruling out any immediate reduction.
The decision is likely to prolong pressure on household budgets and keep transport costs elevated across the economy, with cargo transporters, farmers and manufacturers also yet to signal any significant reduction in their charges following the latest fuel price adjustment.
The Energy and Petroleum Regulatory Authority (EPRA) last week reduced the price of diesel by Sh5 per litre to Sh217.86 in Nairobi for the period ending September 14. Petrol remained at Sh214.03 per litre and kerosene at Sh191.38.
A spot check by the Star yesterday showed that most matatu routes in Nairobi have retained fares that are between Sh20 and Sh30 higher than levels prevailing before the sharp fuel price increases earlier this year.
Most fares on key routes average between Sh100 and Sh150, up from Sh70 to Sh130.
The Matatu Owners Association (MOA) however dismissed the latest diesel reduction as too small to justify a fare review.
“That is a drop in the ocean,” MOA president Albert Karakacha said. “It is not our wish. We are in business and you have to bear with us.”
He said daily earnings for some vehicles had fallen significantly despite higher fares, with a vehicle that previously generated about Sh8,000 a day now averaging only Sh5,500.
Operators cite expensive spare parts, maintenance, insurance, salaries and other costs as reasons for maintaining fares.
But Consumers Federation of Kenya secretary-general Stephen Mutoro said fare-setting in the matatu industry remained largely arbitrary, leaving commuters with little protection.
“This is not a pricing failure. It is a governance failure,” Mutoro said, accusing the National Transport and Safety Authority of failing to enforce rules that would bring greater accountability to public transport.
He said the government should focus on expanding commuter rail and city bus networks, particularly last-mile connections, to give commuters alternatives to matatus.
“Until commuters have real alternatives to matatus, they will remain hostages to a cartel that prices arbitrarily and answers to no one,” Mutoro said.
In April, EPRA raised petrol by Sh28.69 per litre and diesel by Sh40.30, pushing the prices to Sh206.97 and Sh206.84 respectively at the time.
The government later cut Value Added Tax (VAT) on petroleum products from 16 per cent to eight per cent in April 2026 to counter surging global fuel prices caused by Middle East conflicts.
This temporary relief lowered pump prices and was extended in July through October 14, 2026, alongside targeted subsidies.
Diesel subsequently reached a national average of Sh232.86 per litre in May, while petrol climbed to Sh214.25.
The Kenya Transporters Association had warned that diesel increase would have a major impact on freight charges.
The association said fuel accounts for about 55 per cent of total operating costs in road freight.
Transporters are therefore also under pressure to review their rates, meaning the modest reduction in diesel prices may have little immediate impact on the cost of moving goods.
The ripple effects could extend to agriculture and manufacturing, where diesel is widely used to power machinery, generators and transport operations.
The high transport cost is also driving inflation.
Kenya National Bureau of Statistics data showed annual inflation rose to 6.5 per cent in July from 6.4 per cent in June, with food, transport and housing-related costs remaining key drivers.
Transport costs rose 15.6 per cent, while food and non-alcoholic beverages increased by nine per cent.
