14 August 2018

Kenya: Matatus to Hike Fares Next Month

Photo: daily Nation
Matatu public service operators in Nairobi.

Commuters across the country are bracing for tougher times as owners of public service vehicles mull increasing their charges from next month.

Matatu Owners Association (MOA) chairman Simon Kimutai said they will increase fares charged on passengers immediately the government implements the 16 per cent tax levy on petroleum products.

He said this will mean that passengers across the country will have to dig deep into their pockets as the taxation will greatly affect public service operators.

In Nairobi, Mr Kimutai said, fares will increase by between Sh10 and Sh30, depending on the route and distance involved.

Treasury Cabinet Secretary Henry Rotich, during budget statement reading in June, announced that petroleum products will start attracting 16 per cent VAT beginning September 1, a move that will add about Sh17 on every litre of the commodity.

PASS COST TO COMMUTERS

Last week, Treasury Principal Secretary Kamau Thugge confirmed the same, saying petroleum products will begin attracting the tax on September 1 in line with Kenya's promise to the International Monetary Fund two years ago.

Mr Kimutai said the national matatu association will now pass on the new cost to commuters. "The cost is always incurred by anyone who is seeking a service and so the fare increment will be countrywide. The moment the pump prices go up, we will adjust our fares as the levy on fuel translates to an added cost to matatu operators," said Mr Kimutai on Monday.

The new tariff will result in increase in petrol prices to Sh130 per litre in Nairobi, an increment of about Sh17.9.

Mr Kimutai said diesel, which is used by most vehicles, will jump from an average of Sh103. 27 per litre to Sh119.77, an increase of Sh16.5 per litre.

The MOA boss explained that for PSVs heading to and from the city centre, the fare increment will be between Sh10 and Sh30, depending on the distance.

INCREASE FUEL PRICES

In November last year, the association opposed calls to reduce fares in Nairobi after an increase of fuel prices by Sh3, saying the fuel price hike would squeeze the earnings of operators.

To further complicate matters for commuters in Nairobi, the fare increment comes at a time when City Hall is cracking down on matatus flouting the two vehicles per Sacco directive.

This will mean that there will be limited number of vehicles in the central business district at any given time.

However, MOA is criticising the move, saying the county government should have done more assessment on ways to control traffic before settling on reducing the number of matatus.

The association said they were not consulted, adding that the move will adversely affect their businesses.

"It is very important that the county realises that without us, even getting revenue will be impossible and the best thing is to partner with us," Mr Kimutai said.

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