Kenya Lowers Fuel Prices as New 8pc VAT Takes Effect

The Energy Regulatory Commission (ERC) on Friday slashed the prices of a litre of petrol and diesel by KSh8.80 and KSh7.35 respectively following the revision of VAT on fuel to eight percent.

Kerosene prices will go up by KSh10.71 which hit poor households the hardest.

“Pursuant to the Finance Act 2018, the VAT on petrol, diesel, and kerosene has been revised from 16 percent to 8 percent.
Accordingly, ERC has recalculated the maximum pump prices that will be in force from September 21 to October 14, 2018 taking into account the VAT at eight per cent,” ERC director-general Pavel Oimeke said in a statement.
However,  kerosene users will have to part with  Ksh.10 more for a litre of the commodity as a result of the “kerosene adulteration” tax.
“Further, the calculations have taken into account the adulteration levy of Ksh.18 per litre on kerosene in line with the Finance Act 2018.
As a result, treasury aims to raise KSh17.5 billion from 8 per cent VAT on petroleum products and KSh9.8 billion from the “kerosene adulteration” tax.