Gradual removal of Fuel subsidy
19 September 2022
Good Morning. A lot happened last week: President William Ruto and Deputy President Rigathi Gachagua were sworn in, the fuel subsidy was removed and port operations are to be moved back to Mombasa. However, news that the Government only had Ksh 93.7 Million in its account topped the chart.
Gradual removal of Fuel subsidy
The government announced the commencement of a gradual removal of the fuel subsidy.
In the latest monthly review by the Energy and Petroleum Regulatory Authority (EPRA), the price of petrol went up by Ksh 20.18 to retail at Ksh 179.30 per litre, A litre of diesel will retail at Sh165 (a Ksh 25 increase), Kerosene will retail at Ksh147.94 per litre (a Ksh 20 increase)
According to EPRA, the fuel subsidy for petrol had been removed. However, a subsidy of Sh20.82/litre for diesel and Sh26.25/litre for kerosene have been retained.
The Treasury will save an estimated Sh9.49 billion from the partial withdrawal of fuel subsidies
TRAVEL
United States Embassy removes interview requirements for some visa categories
The United States Embassy in Nairobi has removed the interview requirements for some visa categories inorder to reduce Covid-linked backlogs for nonimmigrant applications.
“Effective immediately, those applying for tourist/business (B1/B2), student (F,J,M), or crew visas (C1/D) categories may be eligible for a visa renewal without an interview,” the US Embassy
Qualifications for the program
An applicant must be applying for the same visa category,
The applicant’s visa must not have expired more than four years ago.
COMPANIES
Uber Challanges regulations that intend to cap the amount of commission it charges
Kenya’s National Transport and Safety Authority (NTSA) plans to enforce a regulation that caps the commission for all ride-hailing companies in the country at 18%.
Uber, which charges a 25% commission on its trips, stated that the regulation will stifle innovation and Kenya’s economy. The company argued that cutting down its commission by 7% would limit its ability to operate optimally and productively in the country
Uber explained that its pricing system covers promotional price cuts to attract riders, general operational costs, health insurance on the trip for all users, and support of safety technology for passengers and drivers.
Uber has made an application to the High Court seeking the court to declare the regulation invalid
Comments from other ride-hailing companies
Bolt, which charges a commission of 20%, is yet to issue a statement on the matter.
Little’s CEO, Kamal Budhabhatti, stated that the cap on commissions was okay because it would hinder its competitors from offering perks like reduced costs and recurrent discounts, which Little cannot provide to its customers because of its lower 15% commission.
TRADE
UK demands that its exports to Kenya be exempted from the East African Community (EAC) tax charges
The UK has demanded that its exports to Kenya be exempted from the newly raised East African Community (EAC) tax charges that took effect on 1 July 2022.
Backstory: On 5 May 2022, by the Partner States of the EAC raised the Common External Tariff (CET) for imports entering the bloc by up to 35%. This levy is imposed on imported finished products from non-member States in a strategy to stimulate local industry and production.
The UK stated that the levy should not apply to them since the two nations (UK and Kenya) had signed an Economic Partnership Agreement (EPA) prior to the amendment to the Common External Tarrif. Based on the Partnership Agreement with Kenya, the United Kingdom wants Kenya not to apply the CET levies on its products.
Details on the Economic Partnership Agreement (EPA)
Kenya signed the EPA with the UK on December 8, 2020.
The UK Parliament ratified it on March 5, 2021.
Kenya’s National Assembly ratified it on March 9, 2021.
ELECTRICITY
Higher Electricity Costs
The Energy and Petroleum Regulatory Authority (Epra) quietly hiked pass-through costs last week. The costs include fuel, forex and inflation adjustments.
As a result, the cost of a kilowatt hour unit is up by Ksh 25.3 for domestic consumers who use more than 100 units a month.
What this means
With Ksh1,000 consumers will get 39.5 units of power, down from 45.7 units of power.
Industries and Heavy consumers will have their power costs rise even higher since the pass-through costs now account for more than 1/3 of power bills.
WHAT YOU MIGHT HAVE MISSED
Kweli Capital is now licensed by the Capital Markets Authority (CMA)
Kweli Capital has been licensed by the Capital Markets Authority (CMA) for its Amaka Umbrella Fund, which targets savers looking to buy homes. The umbrella fund is filling the gap created by the now defunct National Housing Development Fund (NHDF).
It will be funded by retail investors (through the BomaYangu portal), high net worth investors, pension funds and institutions.
Kenya’s economy to grow 5.8% in the fiscal year 2022/23
Kenya’s treasury projected that the economy will grow 5.8% in the fiscal year 2022/23 and average 6.2% over the medium term. Accordig to the Budget Review and Outlook Paper for 2022, Kenya’s economy will be supported by a surge in private sector activities, including recoveries in agriculture.
Licensing Deadline for Digital Credit lenders
Digital Credit Providers had until Saturday, September 17th, 2022, to apply for new licenses from the Central Bank or risk closure of their lending business.
According to a legal alert issued by Pricewaterhouse Coopers (PwC), the Central Bank has the power to issue, suspend or revoke digital credit licenses, approve channels through which digital credit providers may be conducted, determine parameters for pricing of digital credit or direct any other actions as it may consider necessary.
The procedure for licensing of Digital Credit lenders
Applicants submit their proposed names to the Central Bank of Kenya (CBK) for approval.
The CBK may grant or reject the application within sixty (60) days from the date of receipt of the application.
If the application is granted, the applicant can then Incorporate a company with the Registrar of Companies.