On Wednesday, June 28, matatu operators announced their intention to increase fare prices in July. This follows the implementation of the Finance Bill 2023.
Albert Karakacha, Chairman of the Matatu Owners Association, explained that the fare increases were necessary. This is to ensure their businesses remain profitable given the high cost of living. He urged Kenyans to be patient with drivers and conductors, as the price adjustments were beyond their control.
“If you go to the supermarket, the prices of products have increased across the country. There is no way we can continue running our business the same way. The tax increase will also increase the prices of fuel across the country,” he stated.
Karakacha also cautioned operators against exploiting customers by setting excessively high fare prices and emphasized the need for moderation.
The decision to raise fares came after a plea from Raila Odinga, the leader of Azimio, urging operators to resist the increased levy by accommodating more passengers instead of raising charges.
In response, the operators suggested that Odinga could instead help Kenyans by advocating for reduced insurance premiums and taxes on vehicle spare parts.
The Association of Matatu Operators (AMO) also noted that the former Prime Minister’s call to carry excess passengers was ill-informed.
“Azimio could mean good but ultimately it is breaking the law. We have insured our vehicles. In case of any accident when carrying excess passengers, there will be no compensation,” AMO noted.
President William Ruto signed the Finance Bill 2023 into law on Monday, June 26. The bill approved the implementation of an increase in Value Added Tax (VAT) on fuel from 8% to 16%.
The additional 8% VAT, equivalent to Ksh14.592, will be added to the existing price of petrol. This change is expected to have a significant impact on fuel prices, national revenue, and the cost of essential household products, assuming other supply and demand factors remain constant.
