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Why matatu operators plan to increase bus fare from next month


Commuters across the country are bracing for tougher times as owners of Public Service Vehicles (PSVs) mull increasing their charges from next month.

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

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

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

TAX INCREASE

Mr Kimutai said that the national matatu association will pass on the new cost from the tax increase.

“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.

He said that diesel, which is used by most vehicles, will jump from an average price of Sh103. 27 to record price of Sh119.77, representing an increase of Sh16.5 per litre after adding the tax.

The MOA chair said that in Nairobi for example, motorists will have to fork out Sh130.15 for every litre of petrol beginning next month.

This, he said, will be an increment of about Sh17.9.

OPERATING IN NAIROBI

In light of the above, this will mean that matatus operating in Nairobi will increase their fares by approximately between Sh10 and Sh20, depending on the route and the distance covered.

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

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

This will mean that there will only be limited number of vehicles in the Central Business District at any given time.

However, MOA has resisted the order, saying the county government should have done more assessment on ways to control traffic before settling on reducing of the number of Matatus.

The association said that they were not involved in coming up with the decision and time was not taken to look at the effects the directive will have on the economy of the country. “It is very important that the county government realizes that without us even getting revenue will be impossible and the best thing is to partner with us,” said Mr Kimutai.