Treasury Cabinet Secretary John Mbadi has dismissed the ongoing matatu strike as unnecessary, saying the protests are happening at a time when global fuel supply shocks and rising import costs are pushing up petroleum prices across many countries, including Kenya.
Speaking on Tuesday, Mbadi said the current situation in the petroleum sector is being driven by international market disruptions that have made fuel more expensive to source and import. He noted that the cost of importing petroleum products has increased sharply from 642 US dollars to 1120 US dollars per metric ton, forcing importers to turn to costlier supply routes.
At the centre of the price pressure is a tightening global supply chain that has reduced available fuel in traditional markets. This has pushed countries like Kenya to seek alternative sources such as India, which comes with higher freight and insurance charges, further increasing landed costs.
The Energy and Petroleum Regulatory Authority (EPRA) recently adjusted fuel prices upward, with Super Petrol now averaging about Sh214.25 per litre in Nairobi and Diesel about Sh242.92 per litre. The new prices have moved both products above the Sh200 mark, reflecting continued pressure from global crude oil trends, currency shifts, taxes, and distribution costs.
Mbadi said the government has already stepped in with financial support to cushion consumers from the rising cost of fuel. According to him, subsidies have been rolled out in phases, with billions directed toward stabilising prices.
“You can see the government has already intervened significantly,” he said, citing fuel subsidies amounting to over Sh6.2 billion in the initial phase and a further Sh5.5 billion later, alongside an additional Sh5 billion allocation going forward.
However, he warned that the fiscal space for further relief is limited due to budget constraints, saying spending pressures are already stretched. “We are in the month of May. We have basically exhausted our budget,” he expressed, noting that only June obligations such as salaries and transfers to counties remain pending in full detail.
He questioned whether additional relief measures would force the government to cut essential expenditures. “Are we going to reduce the transfers to counties? Are we going to cut salaries of public servants?” he posed, adding that the options available are few given current commitments.
Mbadi linked the current crisis to global supply disruptions affecting petroleum availability and pricing, saying the challenge is not unique to Kenya. “The strike is completely uncalled for because we need to understand the genesis of the crisis we are in,” he said, adding that the situation is tied to global supply constraints affecting fuel availability.
“This is a global phenomenon,” he noted, explaining that countries dependent on shared shipping routes and supply hubs have been forced to adjust procurement strategies.
He added that the government-to-government (G-to-G) fuel procurement arrangement remains a key part of Kenya’s strategy to maintain steady supply and protect the economy from unpredictable market swings. He rejected calls to scrap the system, saying it would expose the country to greater risk.
“Look at countries where there is a free market, they are not doing better,” he said, arguing that the G-to-G model helps stabilise supply, reduce freight pressure, and manage foreign exchange demand linked to fuel imports.
Mbadi said the arrangement also helps shield the shilling from sharp pressure by managing dollar demand linked to petroleum imports. He warned that abandoning the system could lead to instability and even fuel shortages similar to what has been seen in some regional markets.
He added that consultations are ongoing with stakeholders in the transport and energy sectors, including matatu operators and oil marketers, to find a workable solution to the price pressure and disruption.
“We will discuss. I am happy that we started a very constructive and productive debate with these players yesterday,” he said, expressing hope that ongoing talks will ease tensions and lead to a settlement.
Despite the tension in the transport sector and rising public concern over fuel costs, Mbadi maintained that government interventions, global market realities, and structured procurement systems remain key to avoiding a deeper crisis in fuel supply.