Just hours after Kenyans celebrated a rare reprieve at the pump, the country's matatu industry has thrown a cold bucket of water on hopes for immediate relief on bus fares — telling millions of daily commuters to wait, while operators huddle behind closed doors.

Despite the Energy and Petroleum Regulatory Authority (EPRA) slashing petrol prices by Ksh9.37 per litre and diesel by Ksh10.21 in Nairobi following a dramatic VAT reversal from 16% to 8%, Matatu Owners Association (MOA) President Albert Karakacha has ruled out any instant fare adjustments.

“We should be given two to three days to consult and communicate to the media regarding adjustments in fare prices,” Karakacha said. “We have already fixed our prices. We are businessmen.”

That business-minded stance translates into continued pain for commuters who saw fares soar by as much as 25% across major routes just days earlier — a spike triggered by the very fuel surge that has now been partially reversed.

The VAT Rollercoaster: A Policy Whiplash

The current standoff follows a dizzying 48-hour policy drama. Treasury CS John Mbadi first slashed VAT on fuel from 16% to 13% via gazette notice. Then, after nationwide outcry — including street protests and social media firestorms under #ReduceFareNow — President William Ruto intervened, pushing the tax down further to 8%.

But for matatu owners, the math hasn't changed fast enough.

“Fuel prices are still high, and we will be demanding further cuts,” Karakacha added, arguing that operational costs — from spare parts inflation to licensing fees — remain elevated despite the pump relief.

Research Brief: The Asymmetry of Transport Pricing

Transport economics research consistently documents what Kenyans are now living: fuel prices rise like a rocket but fall like a feather.

A 2023 study published in the Journal of Transport Economics and Policy found that passenger fares in deregulated transport markets adjust asymmetrically — with increases passed to consumers within 48 to 72 hours, but decreases taking an average of 12 to 18 days, if implemented at all.

Kenya's own Competition Authority noted in its 2024 Sector Report that matatu fare adjustments “exhibit significant downward rigidity,” citing cartel-like behaviour on high-volume routes and lack of price transparency as compounding factors.

Dr. Mwangi Karue, an economist at the University of Nairobi, told HyperMax Digital: “The operators' 'consultation period' is not about logistics — it's about profit preservation. They captured the upside instantly. The downside requires meetings. That’s not economics. That’s strategy.”

Commuters Cry Foul

For Jane Wanjiku, who commutes daily from Kitengela to Nairobi’s CBD, the operators’ stance is a betrayal.

“When fuel went up on Tuesday, my fare went from Ksh150 to Ksh200 the very next morning — no consultations, no three-day wait,” she said. “Now prices drop, and suddenly they need meetings? We are not fools.”

Her sentiment echoes across social media, where hashtags like #LowerFaresNow and #MatatuCartel have trended intermittently throughout the week.

What Happens Next?

Karakacha has promised a final decision within 72 hours, following internal meetings with Sacco leaders and route associations. But commuters remain skeptical, recalling similar “consultation periods” following past fuel drops that yielded no fare reductions whatsoever.

The MOA has also hinted at raising the spectre of other rising costs — including new speed governor regulations, insurance premium hikes, and inflation on tyres and lubricants — as justification for maintaining current fares.