A sharp rise of the price of a litre of diesel by Sh40 and Sh28 on petrol announced by Kenya’s Energy and Petroleum Regulatory Authority (EPRA) has kicked up a storm pushing the government to cut the Value Added Tax (VAT) on fuel products to about half, from 13 percent to eight percent, to help ease the cost burden and cushion consumers.
The government has also deployed a stabilization fund of Sh6.2 billion through the Petroleum Development Levy to ease the burden of landed costs while preventing severe domestic price shocks on consumers. For kerosene, a subsidy of Sh96.56 a litre will apply, Sh23.92 on a litre of diesel and, for super petrol, Sh4.68 per litre.
That means motorists in Nairobi will pay Sh197.60 to get a litre of super petrol, Sh196.63 for diesel, even as kerosene prices remain at Sh152.78. In Mombasa, super petrol will attract Sh194.32, diesel Sh193.35, while kerosene will still retail at Sh149.49.
Acting EPRA Director General Dr. Joseph Oketch in a statement released on Wednesday, April 15, said that the tax cut, set to remain in force until the midnight of May 14, 2026, will save public from costly fuel prices.
“As a result, the pump price per litre in Nairobi of super petrol and diesel decreased by Sh9.37 and Sh10.21 respectively while that of kerosene remains unchanged,” Oketch said.
Consumers and businesses that had started feeling the strain of rising fuel prices now have some reprieve thanks to the VAT decrease.
EPRA further observed that earlier this year, in February, ripple effects of the US-Israel strikes on Iran disrupted the Strait of Hormuz waterway, which is a checkpoint of 20 percent of world’s oil supply.
Besides the Middle East conflict, the earlier fuel price increase had been attributed to high landed costs of petroleum products in the international market, driven by global price fluctuations. But high-ranking government officials the cut in VAT will not only help reduce transportation costs, but also stabilize short-term prices for goods and services.
“Yesterday, we saw fuel prices increase, but there is no need to worry. Even with the rise, the national government took decisive measures,” Energy and petroleum CS Opiyo Wandayi, said aheasd of the official EPRA communication.
- Pain at the pump as EPRA spikes fuel prices by up to Sh40
The government has deployed a stabilization fund of Sh6.2 billion through the Petroleum Development Levy to ease the burden of landed costs while preventing severe domestic price shocks. For kerosene, a subsidy of Sh96.56 a litre will apply, 23.92 per a litre of diesel and, for super petrol, Sh4.68 per litre.
Government further observed that earlier this year, in February, ripple effects of the US-Israel strikes on Iran disrupted the Strait of Hormuz waterway, which is a checkpoint of 20 percent of world’s oil supply.
conflict in Middle East has seen many countries shoulder heavy burden after key sectors of the economy were badly hit.
Meanwhile, opposition leaders have also called for the implementation of tax reliefs and immediate termination of government-to-government oil import deal that they say is simply profiteering a few top echelons.
Democracy for Citizens party leader Rigathi Gachagua has alleged that the initial high fuel prices was meant to earn “Ruto a profit of Sh5 per every litre” or the “equivalent of Sh2.5 billion”.
“William Ruto saw a big business opportunity to fleece Kenyans, as he has always done,” Gachagua said.
