The Energy and Petroleum Regulatory Authority (EPRA) will announce new fuel prices on Friday, June 30, after the adoption of the Finance Act 2023.
EPRA cited the doubling of the Value Added Tax (VAT) on fuel from 8% to 16% in a statement issued on Thursday, June 29.
The additional 8% VAT on the products is projected to have a major impact on the price of fuel per litre, national revenue, and the cost of vital home products.
EPRA will publish the new prices less than two weeks after lowering the cost of fuel on Wednesday, June 14.
In price ratio settings, the fuel’s VAT is expected to raise the existing cost of petrol by 8%.
The fuel’s VAT is expected to raise the current price of petrol in pricing ratio settings, with the additional 8% equaling Ksh14.59.
To put it into perspective, petrol is expected to retail at Ksh196.9 per litre from the current Ksh182.4 price in Nairobi. Diesel is projected to increase from Ksh167.28 to an average of Ksh180.6624 per litre at fuel stations in Nairobi.
Kerosene will cost an average of Ksh174.39 from the current Ksh161.48.
According to President William Ruto, the 16 per cent increment is 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 outweighed the negatives of increasing the VAT tax.
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.
