Commuters in Nairobi have been left puzzled after electric buses joined traditional matatus in raising fares following the latest fuel price review by the Energy and Petroleum Regulatory Authority (EPRA).
On Wednesday, April 15, matatu operators across the country implemented a fare hike of up to 25 per cent, with some Nairobi routes seeing passengers pay as much as Ksh 50 more. The increase came shortly after EPRA announced higher prices for petrol and diesel, triggering a ripple effect across the public transport sector.
However, what caught many commuters off guard was the decision by electric buses—vehicles that do not rely on petrol or diesel—to also increase fares.
Why Electric Buses Are Raising Prices
At first glance, the move appears contradictory. Electric buses are powered by batteries, not fossil fuels, so logically, they should not be directly affected by fuel price hikes. But the reality is far more complex.
The fare adjustment has less to do with energy sources and more to do with the broader economics governing Kenya’s public transport system.
1. Unified Fare Structures Across Saccos
In Kenya, public transport fares are rarely determined by individual vehicles. Instead, they are collectively agreed upon by Saccos and industry bodies such as the Matatu Owners Association.
Many of these Saccos operate mixed fleets that include both diesel-powered matatus and electric buses. When a fare increase is agreed upon, it is typically applied across the board to maintain uniform pricing within the Sacco.
This means electric buses are not priced independently—they follow the same structure as fuel-powered vehicles on the same routes.
2. Market Pressure and Competition
Even when electric bus operators might have the flexibility to maintain lower fares, market dynamics make it difficult.
If diesel-powered matatus increase fares, electric buses charging lower rates could be seen as undercutting competitors. This often leads to tensions among operators and can disrupt coordination within transport networks.
To avoid what is perceived as unfair competition, operators tend to align their fares, ensuring stability across the market.
3. Electricity Costs Are Indirectly Affected
While electric buses do not use fuel directly, the electricity used to charge them is not entirely immune to fuel price fluctuations.
Kenya’s power generation mix includes thermal plants that rely on fuel. When global fuel prices rise, the cost of running these plants also increases. This, in turn, can influence electricity tariffs.
As a result, the cost of charging electric buses may rise indirectly following fuel price adjustments, contributing to higher operational expenses.
4. Rising Cost of Maintenance and Spare Parts
Fuel price hikes also have a wider economic impact beyond the transport sector.
Higher diesel costs increase the price of transporting goods across the country. This affects the cost of spare parts, maintenance services, and vehicle components.
Even electric buses rely on tyres, suspension systems, imported parts, and bodywork—all of which are subject to inflation driven by rising fuel costs.
5. Inflation Across the Economy
When fuel prices go up, the cost of living generally rises. Businesses across various sectors adjust their prices to cope with increased expenses.
Public transport operators are not exempt. To maintain profitability and sustain operations, they often pass these additional costs on to passengers, regardless of whether their vehicles use fuel directly.
What This Means for Nairobi Commuters
For commuters, the takeaway is simple: transport fares in Nairobi are influenced by a network of economic factors, not just the type of fuel a vehicle uses.
Electric buses may offer long-term cost advantages and environmental benefits, but in the short term, they are still tied to the same economic pressures affecting the entire transport industry.
As long as fare structures remain coordinated and the broader economy reacts to fuel price changes, passengers should expect electric buses to move in step with traditional matatus when it comes to pricing.