Nyoro proposes Sh27 fuel price cut through tax rollback and subsidy boost
NAIROBI, Kenya, Apr 15 — Kiharu MP Ndindi Nyoro has proposed a raft of fiscal measures — including a Sh5 billion subsidy top-up, a five-percentage-point VAT cut and the removal of a Sh7-per-litre fuel levy — in a bid to lower pump prices by up to Sh27 per litre.
In a statement issued Wednesday, Nyoro argued that the current fuel pricing regime has become unsustainable for households and businesses, warning that persistently high costs risk triggering broader economic strain through rising transport and production expenses.
“The drastic increment in fuel prices is unacceptable; a more humane adjustment must be made by reducing pump prices now,” he said.
“Kenyans are simply demanding the reduction of levies and taxes to the levels they were before 2023.”
Nyoro’s proposal hinges on three key interventions: reinstating taxes and levies to pre-2023 levels, enhancing subsidies, and improving transparency in fuel pricing.
He estimates that scrapping the Sh7 fuel levy introduced in 2024, combined with a five-percentage-point VAT reduction — equivalent to about Sh8 per litre — and an additional Sh5 billion injection into the Fuel Stabilisation Fund could cumulatively lower pump prices by up to Sh27 per litre.
The lawmaker noted that with Kenya consuming roughly 400 million litres of fuel monthly, a stronger subsidy allocation — potentially rising to Sh10 billion in the short term — would provide immediate relief to consumers.
Nyoro also criticised the current VAT adjustment as insufficient, calling for a return to the 8 percent rate that existed prior to 2023, alongside a temporary exemption during the current price shock.
Beyond pricing, the MP raised concerns over inadequate communication around the fuel pricing structure, warning that uncertainty could trigger hoarding within the supply chain.
He further questioned the transparency of government-to-government (G-to-G) fuel import arrangements, alleging that the system may be distorting prices and benefiting a few players at the expense of consumers.
Nyoro contrasted current local fuel prices with global trends, noting that international oil prices have eased to below $100 per barrel, compared to peaks of over $115 in 2022 — a period when domestic pump prices remained significantly lower.
This, he argued, raises questions about the tax burden embedded in local fuel pricing rather than global cost pressures.
His remarks come on the back of the latest review by the Energy and Petroleum Regulatory Authority (EPRA), which saw the price of super petrol rise by Sh28.69 per litre and diesel by Sh40.30.
The hike has already triggered a ripple effect across the economy, with public transport operators and logistics firms beginning to adjust fares and charges upward, signalling potential inflationary pressure in the coming weeks.