Fuel subsidy stupid idea - now making Kenya another Nigeria

[RV Pundit]

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Bitting fuel shortage.
Ufool instead of concentrating on steadying the economy - has the Borana finance CS busy campaigning for him in pastoral areas.

https://www.citizen.digital/business/hard-times-ahead-as-kenya-faces-looming-fuel-shortage-n295323

[Githunguri]

What should the government do?

[RV Pundit]

Reduces taxes until global prices go down.
Avoid fuel subsidy.
It betters people pay 200shs per liter than we run out of fuel.

What should the government do?

[Githunguri]

Reduces taxes until global prices go down.
Avoid fuel subsidy.
It betters people pay 200shs per liter than we run out of fuel.

What should the government do?

1) What is the percentage of tax on fuel products?

2) How much does fuel tax contribute to National revenue?

3) How much subsidy has the government been issuing to oil marketers?

4) How long has the goverment been subsidizing the oil marketers?

5) What would be the political ramifications of reducing GOK intervention?

[RV Pundit]

You're starting to sound like Pajero

1) What is the percentage of tax on fuel products?

2) How much does fuel tax contribute to National revenue?

3) How much subsidy has the government been issuing to oil marketers?

4) How long has the goverment been subsidizing the oil marketers?

5) What would be the political ramifications of reducing GOK intervention?

[Githunguri]

You're starting to sound like Pajero

1) What is the percentage of tax on fuel products?

2) How much does fuel tax contribute to National revenue?

3) How much subsidy has the government been issuing to oil marketers?

4) How long has the goverment been subsidizing the oil marketers?

5) What would be the political ramifications of reducing GOK intervention?

Answer point to point and we will have a sensible discussion

[Pajero]

Pundito please don't involve me in your wars.

[RV Pundit]

Why dont you do your own research - more than half of petrol price is taxes+levies - fuel levy alone is a lot.

Answer point to point and we will have a sensible discussion

[Githunguri]

Why dont you do your own research - more than half of petrol price is taxes+levies - fuel levy alone is a lot.

Answer point to point and we will have a sensible discussion

Precisely,

Fuel is one of the major sources of revenue directly or indirectly. That money is used as security/collateral for government debt to finance construction of roads rail dams etc

The purpose of SUBSIDY is just governmental intervention to  cushion the masses,

Otherwise,DON'T POST BULLSHIT NEXT TIME

[RV Pundit]

The BULLSHIET is that your uncle Uhuru is unable to finance the fuel subsidy and now petrol companies are not stoking - because they are owed billions by a broke gov - five months arrears.

Now when they stop supplying fuel - the economy crashes.

He is  in a fix - because he want to steal and loot the last time - so he is diverting money to opaque security sector - instead of using to cushion the poor

Otherwise,DON'T POST BULLSHIT NEXT TIME

[Githunguri]

The BULLSHIET is that your uncle Uhuru is unable to finance the fuel subsidy and now petrol companies are not stoking - because they are owed billions by a broke gov - five months arrears.

Now when they stop supplying fuel - the economy crashes.

He is  in a fix - because he want to steal and loot the last time - so he is diverting money to opaque security sector - instead of using to cushion the poor

Otherwise,DON'T POST BULLSHIT NEXT TIME

Take UDA nomination fees and finance the Gok subsidy

[sema]

he BULLSHIET is that your uncle Uhuru is unable to finance the fuel subsidy

Why was the fuel subsidy introduced in the first place?

[Arcadian_Dreamer]

My economic lessons are bearing fruit 

Bravo Punda. Yes subsidies will choke an economy like hyacinth is lake Victoria.

[RV Pundit]

I support subsidies to farmers and targetted poor 100%.  Subsidizing big manufacturers providing million of employment is great.

I oppose subsidizing Unga or fuel - but subsiding seeds and fertilizers. I support subsidizing inputs. Seeds, electricity for industries, zero taxes for mass employers, anything that we have control over.

You can control input subsidizing - but it's impossible to control output - because it's scale out quickly.

My economic lessons are bearing fruit 

Bravo Punda. Yes subsidies will choke an economy like hyacinth is lake Victoria.

[Arcadian_Dreamer]

I support subsidies to farmers and targetted poor 100%. Subsidizing big manufacturers providing million of employment is great.

I oppose subsidizing Unga or fuel - but subsiding seeds and fertilizers. I support subsidizing inputs. Seeds, electricity for industries, zero taxes for mass employers, anything that we have control over.

You can control input subsidizing - but it's impossible to control output - because it's scale out quickly.

That is how cronyism starts. Bad idea.

seeds, fertilizers, and other farm inputs should not be supported, or taxed at low or preferential rate, doing so opens avenues for corruption, cronyism, provides mal incentives.

What is the solution?... Low taxes, light but smart regulation, and getting predatory officials off the necks of the wananchi

[sema]

Poor countries like Kenya cannot afford subsidies, but why did Uhuru implement a fuel subsidy to begin with?

Kenyans and Africans need to become more productive and literally work their way out of their poverty.  The question is how do you pull an extremely poor African country out of poverty? No one has managed to do that yet in almost 60 years. Not one country even those with oil.

[RV Pundit]

That is part that capitalism cannot answer - and a bit of socialism is needed - as long as it's sustainable. Farmers need small push to produce more food -

Poor countries like Kenya cannot afford subsidies, but why did Uhuru implement a fuel subsidy to begin with?

Kenyans and Africans need to become more productive and literally work their way out of their poverty.  The question is how do you pull an extremely poor African country out of poverty? No one has managed to do that yet in almost 60 years. Not one country even those with oil.

[hk]

subsidies are terrible economic interventions that don't spur organic productivity growth. In the 80s kenya had importation substitute, once the economy was liberalized all those industries collapsed. Agriculture subsidy for fertilizers are populist but there's no permanent solution to make sure farmers would afford fertilizers without subsidies. Subsidies literally means that the public partially pays for the product. Jump starting a sector might be understandable but most subsidies don't have sunset clauses. The fuel subsidy was implemented to try to lower price of fuel, IMF forced kenya to add 8% vat tax, without taxation the subsidy wouldn't have been necessary.

[RV Pundit]

Yes there lots of problems with subsidies..like fertilizer will end up in Uganda as people do abtritage rather than farming.But there has to be deliberate intervention to help the poor..you can either give them welfare cheque turning them into zombies or subsidy...either way you cannot run economy entirely like profit minded company..you will have a south Africa and Kenya situation..few rich..many poor.Kenya GINI coefficient is near South Africa.Life was better in 80s...so we need to think about doing the unusual

[gout]

If India is buying Russian oil at a discount price why can't we? South Sudan oil??

Tanzania phosphates and Eldoret fertilizers plant??

Palm oil in Western Kenya?? Uganda?? DRC??
https://news.mongabay.com/2017/08/doubts-cloud-kenyas-renewed-palm-oil-ambitions/