Fuel prices in Kenya have been revised upwards by the Energy and Petroleum Regulatory Authority (Epra) amidst a skyrocketing cost of living.
The revision in fuel prices is a result of the National Treasury doubling the Value Added Tax (VAT) on petroleum and petroleum-related products from 8 per cent to 16 per cent in the Finance Act 2023.
Consequently, petrol increased by KSh13.49 per litre, diesel by KSh12.39 and kerosene by KSh11.96.
In Nairobi, a litre of super petrol will retail at KSh195.53 while diesel will surge to KSh179.67.
“Pursuant to the Finance Act, 2023, VAT on super petrol, diesel, and kerosene has been revised from 8 per cent to 16 per cent effective 1st July 2023. Accordingly, Epra has recalculated the maximum pump prices that will be in force from 1st to 14th July 2023 taking into account VAT at 16 per cent,” EPRA said Friday.
The increase in fuel cost was against the law after the High Court issued interim orders suspending the implementation of the Finance Bill 2023.
“I’m satisfied that the application meets the test for conservatory orders,” said Justice Mugure Thande in a copy of the initial orders in the suit filed by Busia Senator Okiya Omtata.
The matter will be heard on July 5.
The Act is a product of a finance Bill passed by Parliament and assented to Monday by President William Ruto.
𝐏𝐑𝐄𝐒𝐈𝐃𝐄𝐍𝐓 𝐑𝐔𝐓𝐎 𝐀𝐒𝐒𝐄𝐍𝐓𝐒 𝐓𝐎 𝐅𝐈𝐍𝐀𝐍𝐂𝐄 𝐁𝐈𝐋𝐋 𝟐𝟎𝟐𝟑 𝐀𝐍𝐃 𝐀𝐏𝐏𝐑𝐎𝐏𝐑𝐈𝐀𝐓𝐈𝐎𝐍𝐒 𝐁𝐈𝐋𝐋 𝟐𝟎𝟐𝟑
President @WilliamsRuto on Monday assented to the Finance Bill, 2023 and the Appropriations Bill, 2023 at State House, Nairobi.
He also… pic.twitter.com/vEos4D6GRG
— State House Kenya (@StateHouseKenya) June 26, 2023
The doubling of the VAT rate may increase the cost of living owing to Kenya’s reliance on petroleum in the industrial and homestead processes.
Gloomy Midterm Outlook
Kenya’s headline Consumer inflation may continue its steady increase in the coming months amid rising commodity prices.
The official consumer price index (CPI) eased to 7.9 per cent in June from a rise of 8 per cent in May, data released by the Kenya National Bureau of Statistics (KNBS) on Friday showed.
“Whereas the prices of diesel and petrol decreased by 0.7 per cent and 0.4 per cent, respectively, between May 2023 and June 2023, the transport index went up slightly by 0.2 per cent,” the KNBS said in a statement.
“This was mainly due to the increase in fares for city buses and flights during the period.”
Overall, transport costs increased 9.4 per cent in June compared with a year earlier, putting pressure on the prices of other consumer goods.