Kenya: Relief for Motorists As Fuel Prices Drop Slightly

15 September 2018

Motorists can now breathe a sigh of relief after the government announced a slight decrease in fuel prices.

Nairobi motorists will pay Sh2.21 less on a litre of petrol in the latest price revisions by the Energy Regulatory Commission (ERC).

However, ERC announced a Sh0.39 and Sh0.29 increase in the price of a litre of diesel and kerosene respectively.

The prices include the recent 16 per cent value added tax (VAT) imposed on petroleum products.

ERC director-general Pavel Oimeke was, however, quick to point out the possibility of further revisions on the tax that has led to a public outcry.

President Uhuru Kenyatta yesterday proposed that the VAT be halved.

"The prices are inclusive of value added tax at 16 per cent in line with the provisions of the VAT Act 2013. Nevertheless, the commission shall publish new prices whenever the rate of VAT is varied by law," Mr Oimeke wrote in the price revision notice.

PRICE REVISIONS

Nairobi motorists will now buy a litre of petrol at Sh125.59, diesel at Sh115.47 and kerosene at 97.70.

ERC gives monthly price revisions considering the weighted average cost of imported refined petroleum products, with the landed cost of petrol said to have dropped 2.33 per cent while that of diesel rose by 0.40 per cent in August.

The price of kerosene was, however, increased despite a 0.60 per cent drop on its landed cost, perhaps to tame adulteration of fuel.

Before the VAT was loaded on September 1, super petrol was retailing at Sh113.73 while diesel, which is used in heavy machinery and power generation, was retailing at Sh102.74 per litre in Nairobi.

The marginal fall in petrol prices is a relief to motorists who were already overburdened by the heavy taxes on fuel.

ERC's announcement may quell jitters even as parliament resumes next week to consider the proposal by President Kenyatta to cut the VAT to 16 per cent.

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