The Energy and Petroleum Regulatory Authority (EPRA) will, on Friday, June 30, announce new fuel prices following the implementation of the Finance Act 2023.
In a Thursday, June 29 statement, EPRA highlighted the reason behind the adjustment, citing the doubling of the Value Added Tax (VAT) on fuel from eight to sixteen per cent.
The additional eight percent Value Added Tax (VAT) imposed on petroleum products is expected to have a considerable impact on various aspects, including fuel prices per litre, the cost of basic household commodities and national revenues.
This comes two weeks after EPRA, on Wednesday, June 14, reviewed fuel prices leading to a decrease in the cost of petroleum products.
The additional tax was projected to result in an increase in the price of petrol, considering the price ratio settings. The additional eight percent equated to Ksh14.59.
To put it into perspective, in Nairobi, petrol is expected to retail at Ksh196.9 per litre from the current Ksh182.4. The price of diesel is projected to increase from Ksh167.28 to an average of Ksh180.6624 per litre at fuel stations in Nairobi.
Kerosene will retail at an average of Ksh174.39 from the current Ksh161.48.
According to President William Ruto, the 16 per cent increment was projected to make fuel prices more competitive which would subsequently attract foreign investors.
While tabling the bill in Parliament, the National Assembly’s Committee on Finance and Planning stated that the positives of increasing the VAT tax far outweighed the negatives.
Finance Committee chair Kuria Kimani highlighted the need to standardise VAT as the eight per cent had created complexities for both oil marketing companies and the government.
He added that the change was also necessitated by an international commitment to shift to the consumption of clean energy.
“There is a global discussion about climate change and going green. Many countries across the world are moving away from consumption of fossil fuel to consumption of clean energy,” Kimani stated on June 21, 2023.
