MPs Move to Slash Fuel Taxes by Half

An undated photo of Petroleum CS John Munyes in Parliament
  • Kenyans are set to enjoy reduced fuel prices after Members of the National Assembly moved to slash taxes charged on the products by half.

    A statement from the National Assembly Finance & Planning Committee seen by, indicated that the MPs had recommended the reduction on development levy on Petroleum and Diesel from Ksh5.40 to Ksh2.90 per litre.

    The committee, led by Homa Bay Woman Representative Gladys Wanga, also recommended the Value Added Tax (VAT) charged on Super Petrol and Diesel be reduced from 8 per cent to 4 per cent.

    The team also wants the state to revoke the Petroleum Development Levy (PDL) Order, 2020 and provide amount chargeable to the PDL per litre of Super Petrol and Diesel.

    An undated photo of Petroleum CS John Munyes in Parliament

    “The National Treasury should prepare supplementary estimates for consideration which shall reflect the reduction in revenue occassioned by the ammendment,” read the statement in part.

    The committee also sought to reduce VAT charged on Liquefied Petroleum Gas from 16 per cent to 8 per cent and have the rate recorded in the ammendment.

    Regarding to energy companies earnings, the committee recommended that they reduce their gross margins by Ksh3 from Ksh12 to Ksh9 per litre.

    This development comes after a month of uproar over a spike in the commodity’s prices announced on September 14.

    At the time, the Energy and Petroleum Regulatory Authority (EPRA) noted that prices of petrol, diesel and kerosene had increased by as much as Ksh7 per litre for the next 30 days.

    The retail prices for petrol increased by Ksh 7.58 per liter to retail at Ksh 134.72 per liter in Nairobi while diesel increased by Ksh7.94 per liter to retail at Ksh115 per liter.

    Kerosene, on the other hand, had spiked by Ksh12.97 per liter to retail at Ksh110.2 per liter.

    On October 5, Petroleum Cabinet Secretary, John Munyes, hinted that the fuel prices would not drop citing external factors.

    Munyes explained that the government could not reduce the prices of fuel because the costs are determined by a formula.

    “The cargos will close on October 10, 2021, and therefore, it is at that time that we will know whether they are going up or down. So it is not rocket science. It is not something that I can say I will do because it is a formula that determines the price,†Munyes affirmed.

    The CS was later fined Ksh 500,000 for failing to appear before the committee to answer questions over the hike in fuel prices. 

    The committee has been investigating the increase in fuel prices, which were a record high in September. 

    Homa Bay Woman Representative Gladys Wanga
    Homa Bay Woman Representative Gladys Wanga addresses MPs on Friday, July 17, 2020.