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Treasury eyes Sh0.9m fuel saving per car on electric vehicle switch
Energy & Petroleum Principal Secretary Alex Wachira (centre) with Kenya Power Managing Director Joseph Siror (left) and chairperson Joy Brenda Masinde (right) poses with an electric vehicle at KICC Nairobi on April 23, 2024 during the 2nd Kenya Power E-Mobility conference and Expo.
A change over to electric vehicles (EVs) would yield an annual net saving of Sh984,580 on fuel expenses per unit under the leasing programme now entering the twelfth year, disclosures by the National Treasury showed.
Treasury says that the State will gradually shift from internal combustion engine vehicles (ICEs) to EVs to shield itself from a daily requirement of 15 litres of fuel per vehicle, which translates to Sh90,000 monthly spending or Sh1.08 million.
To start the switch, the Treasury has invited motor vehicle manufacturers, dealers and assemblers to lease to the State EVs to be used by the National Police Service, Kenya Prisons Services, and other security agencies for non-operational security services.
“By deploying EVs, the Government of Kenya shall realise massive savings in fuel. Unlike ICEs that use fossil fuel for transmission, EVs use electricity that is way cheaper than fossil fuels,” Treasury says in a December 17, 2024 tender call.
Treasury estimates show that each EV unit will be charged at Sh508 for a 430-kilometre drive, translating to Sh185,000 annually. This means one EV unit shall save the government Sh894,580 annually in fuel alone.
The focus on EVs comes even as the government's expenditure on transport costs nearly doubled in the past four years, mainly driven by spending on fuels, lubricants, operations and maintenance.
Statistics on budgetary allocation to government transport show a steady rise from Sh8.6 billion in 2020/21, to Sh9.7 billion in 2021/22, Sh14.3 billion in 2022/23, and a further rise to Sh12.2 billion that is budgeted for the current financial year.
Among the EVs being sought are medium-duty pickups, 4x4 double cabs, single-cab pickups, medium-duty utility passenger vehicles, buses, large trucks, 4x4 heavy-duty utility passenger vehicle caravans, and 4x4 medium-duty trucks. The suppliers will also have to provide charging stations.
In 2013, the government launched the vehicle leasing programme targeting efficient and cost-effective transport for civil servants instead of outright purchases. This will mark the first time it has turned to electric vehicles.
The programme has seen the State lease over 8,000 vehicles for critical public service, including the provision of vehicles to disciplined forces and workers with field operations, such as the police and security personnel, as well as ambulances.
Treasury says the leasing model has cumulatively saved the government Sh2.69 billion by addressing challenges such as fuel misuse, high maintenance costs and obsolescence of vehicles.
According to the Treasury, the programme provides business worth Sh700 million in premiums annually to the insurance sector with, Sh400 million to parts and accessories manufacturers and a market for oil products amounting to Sh2.2 billion annually.
In October, the Treasury came up with draft rules to guide the process of purchasing, using and disposing of government vehicles in a bid to tame the runway transport costs.
Through the Draft Government Transport Policy 2024, Treasury says it is seeking to address the inherent weaknesses in the management of the government fleet.
The draft, if approved into a policy, will be a successor to a June 2006 circular that sought to provide interim measures to streamline government transport while a more permanent solution was being sought.
