The Energy and Petroleum Regulatory Authority has raised the price of fuel following the Kenya Revenue Authority’s move to adjust upwards the Excise Duty on Super Petrol, Diesel, and Kerosene.
According to EPRA, the action was prompted by the average inflation rate of 4.94 percent for the financial year 2019/2020.
As a result, the pump price for petrol in Nairobi increases by KSh1.12 while diesel and kerosene increase by KSh.0.58 per litre respectively. The new adjustments are effective from 3rd October until 14th October.
The excise duty adjustment is in line with the annual inflation rate across the 2019/20 financial year to June 30 and affects the supply of 31 products including cigarettes, fruit juices, wines & spirits and some chocolates.
Kenya Association of Manufacturers (KAM) has been in opposition to KRA’s move to increase excise rates.
“A 5.43 percent increase on these items means increased cost of production, which business will inevitably pass on to consumers through price hikes, to stay afloat. This tax increase will also erode the income of small and medium retailers who rely on the sale of excisable goods for survival,” Phyliss Wakiaga, KAM CE had said.
“The revised adjustment for the rate of inflation; that is, the average inflation rate in FY2019/20 (4.94%). This will be an added layer of headwind on fuel inflation outlook this month, although will be offset by Abu Dhabi National Oil Company (ADNOC) average price decline over the review month (September),” comments Genghis Capital.