Why Govt Reduced Fuel Prices This Month

Hello and welcome to the Money News Roundup Newsletter. Today, we are covering the Ksh4 billion subsidy that led to a drop in fuel prices, the businessman who sold a school for Ksh130, and new students joining universities who have been hit with a fee shocker.

Ksh4 Billion Subsidy to the Rescue

This month, between August 15 and September 14, motorists in Kenya will enjoy cheaper fuel prices after the Energy and Petroleum Regulatory Authority lowered petrol and kerosene prices by Ksh1 and maintained the price of diesel.

A report by Business Daily revealed that the country’s motorists have a Ksh4 billion subsidy reinstated by the government to thank.

The State reinstated the subsidy after collecting nearly Ksh4 billion from motorists and intends to pay oil marketers Ksh400 million to cover the subsidy.

The report further indicated that without the subsidy, Kenyans would have paid Ksh2.04 more for diesel and Ksh2.86 more per litre for kerosene.

Catch Up Quick: In the last two months, the prices of petrol and diesel jumped by Ksh8.99 and Ksh8.67 per month respectively after the subsidy had been depleted.

“The average landed cost of imported super petrol decreased by 0.73 percent from Sh81,201 ($628.30) per cubic metre in June 2025 to Sh80,608 ($623.71) per cubic metre in July 2025. Diesel increased by 3.08 percent from Sh79,688 ($616.59) per cubic metre to Sh82,530 ($638.58),” EPRA said.

“Kerosene increased by 3.2 percent from Sh78,647 ($608.54) per cubic metre to Sh81,165 ($628.02) over the same period.”

Of the Sh26.37 billion that the State raised from the petroleum development levy in the year to June 2025, only Sh13.68 billion was used to subsidise pump prices. This indicates that nearly half of the fund was consumed by other items, leading to its depletion.

Billionaire Who Sold International School for Ksh130

Dubai-based billionaire Sunny Varkey, founder of GEMS Education and business partner of India’s Gautam Adani, sold his high-end Regis School Runda in Nairobi for just $1 (about Ksh130) in 2021 after a failed attempt to capture Kenya’s premium education market, Business Daily reports. Court papers filed in Dubai show the school was transferred to its then country director, Dr Ernest Mureithi, as debts piled up, the Kenya Revenue Authority pursued taxes, and the institution faced mounting financial pressure. The exit was part of a broader strategy by the Varkey Group to abandon operations outside the Middle East.

The institution’s troubles, which included claims of embezzlement, loan defaults and even a school bus being seized by auctioneers, later forced the Burugu family — property developers who had leased facilities to the school — to step in and run it. They eventually sold Regis School Runda to South Africa’s ADvTECH, which also owns Makini Schools, for Ksh1.2 billion in 2023. This came months after a UAE court ordered the winding up of Gems Africa Ltd, the Varkey Group subsidiary that managed the Kenyan venture, marking the final collapse of the billionaire’s short-lived foray into Kenya’s education sector.

Confusion as Varsity Students Await New Fees Structure

With just two weeks before universities reopen, thousands of students and parents are facing uncertainty over how much to pay in fees despite a government directive lowering costs, The Standard reports. The Ministry of Education announced that first-year students would pay between Sh5,814 and Sh75,000 per semester, depending on the programme and financial need. However, many universities have yet to update their online portals, leaving incoming students unsure of the amounts required during registration.

Education Cabinet Secretary Julius Ogamba has assured families that the revised structure is in effect, but parents say the lack of clarity has disrupted preparations. Some institutions are still displaying the old fee levels, such as Sh120,000, creating anxiety for families like Jane Njeri’s, whose daughter is set to join Moi University on September 2. Parents now fear carrying the wrong amount could risk late registration, highlighting the communication gap between the government and universities.

Controversy Persists Over New University Funding Model

President William Ruto’s administration has stood firm on its student-centred university funding model despite mounting criticism. Under the directive, as reported by People Daily, first-year students are expected to pay between Sh5,814 and Sh75,000 per semester, depending on their financial background and programme of study. The Higher Education Loans Board (HELB) has already awarded loans to more than 136,000 applicants for the 2025/2026 academic year. The model, however, has faced legal battles, with the High Court initially declaring it unconstitutional for lack of public participation, before the Court of Appeal reinstated it in March pending a final ruling.

Critics argue the Means Testing Instrument (MTI) used to classify students by financial need is flawed and excludes many struggling households. Seme MP James Nyikal dismissed the system as “impractical.” At the same time, education stakeholders noted that students in remote regions face challenges such as limited internet and lack of access to smartphones or cybercafés. Despite calls for review, the government insists the model ensures no qualified student is left behind because of financial constraints, though stakeholders warn it risks deepening inequality instead of levelling the playing field.

Ethiopia Turns to Kenya for Tax Reform Lessons

Ethiopia is borrowing from Kenya’s tax policies to address a sharp fall in its tax-to-GDP ratio, which dropped from 12.1 percent in 2015/16 to 7.5 percent in 2022/23, among the lowest in Africa, Kenyans.co.ke reports. Proposed reforms include taxing financial services, mobile money, and airtime, designating large firms as VAT withholding agents, and raising VAT from 15 to 17.5 percent. The study noted that Kenya’s excise duty on mobile money, VAT withholding system, and ad valorem fuel tax offer models Ethiopia could adapt to broaden its tax base and improve revenue sustainability.

The report also flagged Ethiopia’s weak tax administration and corporate income tax leakages, pointing to Kenya’s tighter rules on loss carry-forward and its adoption of digital compliance systems such as iTax as benchmarks. Analysts warn that Ethiopia’s reliance on a narrow tax base and generous tax holidays erodes revenue, while political resistance could slow reforms. However, Kenya’s gradual enforcement and diversified tax structure are cited as examples Ethiopia can follow to restore fiscal stability and reduce dependence on external borrowing.

Parliament Drawn Into Controversy Over Kebs Pre-Export Tender

The multibillion-shilling tender for inspection of goods destined for Kenya has moved to Parliament after years of disputes in court, Daily Nation reports. The Kenya Bureau of Standards (Kebs) invited 19 firms in January to bid for the 2025–2028 pre-export verification contract, which requires the winning company to inspect products for quality, safety, and compliance with Kenyan standards before export.

The tender has faced legal challenges, including a case by Precision Experts Ltd that accused Kebs of discriminating against local firms. The case, which went up to the Court of Appeal, was dismissed, allowing Kebs to proceed. The Public Procurement Administrative Review Board later ruled that while procuring entities have discretion to tailor bid requirements, such discretion is not absolute.