The Committee on Finance and National Planning has recommended a number of tax cuts in order to tame fuel costs. Among the recommendations includes halving VAT for all three fuels by four per quarter, trimming petroleum development levy charged at Ksh 2.90 from five pounds sterling (as it stands), reducing price cap regulation charges imposed during peak hours when demand is high so as not discourage use among consumers or businesses whose operations rely heavily upon transportation services such this would be especially helpful considering Nairobi’s constant traffic congestion problems that have been ongoing since 2021
The cost may come down any time now because Kenyan MPs will soon take up their fate which could lead them approving new proposals put forward by The committee chairperson Mr Raila Odinga who said he wanted.
At the same time, the Committee has backed the lowering of supplier margins- profits made by oil marketing companies (OMCs) by Ksh.3 per litre.
If adopted as proposed, petrol users would see the greatest relief at the pump with the cost of the commodity coming down by Ksh.10.49.
Presently, a litre of petrol in the Capital costs Ksh.134.72.
The cost of kerosene and diesel will be coming down soon, reducing the burden on users. The relief for these commodities comes out to about Ksh9/Ks7 each time someone uses it in their fire-starter or oven. VAT rates are also set at 8% instead 16%. This means that buyers save up 166 shillings when purchasing a 13kilo LPG cylinder which currently retail at 24 hundred Kenyan Shilling (KSh).
The Kenyan MPs on the Finance ministry’s committee are calling for a suspension of inflation adjustments and establishment of an oversight board to manage funds raised through petroleum development levies. Additionally, they want taxes collected from oil companies’ products replaced by consumption taxes which would help mitigate increases in fuel prices due their high international crude costs (i.e., Brent).
The Kenyan government has taken several steps to help consumers with high fuel costs in recent months. The Ministry of Petroleum and Mining (MPM), which is tasked with reviewing the current pricing formula for diesel by EPRA, will be halting new bids on Kipevu Oil Terminal II until further notice while also monitoring its completion rate; this decision was made following failed negotiations between oil companies based out of Uganda who own some 20% stake over operations here – they want one million more shillings worth ($1B!) before starting work!
While all these actions have been taking place it seems strange people don’t seem any happier about what’s happening- many are asking why there aren’t enough alternatives when others can produce so much product
The proposals are now the subject of approval by all MPs on the floor of National Assembly after which accompanying amendments to relevant Acts will be assented too or rejected. If they receive President Uhuru Kenyatta’s signature, it is expected that Thursday’s maximum pump prices review – at an EPRA meeting tomorrow- won’t change much for consumers who have seen little fluctuation in recent months due mostly because this year there was no return on price stabilization framework anchor within their oil development Levy fund; instead costs should remain stable between fuel types despite any potential changes coming out East where Islam has just imposed its own tax law last week imposing hefty levies against gasoline amounting 1% per barrel while diesel still stands taxed 5%.