Nyoro proposes Sh27 fuel price cut via tax relief, subsidy

NAIROBI, Kenya, Apr 15 – Kiharu MP Ndindi Nyoro has proposed a series of tax cuts and subsidies aimed at lowering fuel prices by up to Sh27 per litre, as pressure mounts over the rising cost of living.

In a statement, Nyoro outlined key measures including a Sh5 billion subsidy top-up, a 5 percent reduction in Value Added Tax (VAT), and the removal of a Sh7 per litre fuel levy introduced in 2024.

“The drastic increment in fuel prices is unacceptable; a more humane variation must be made by reducing the pump prices now,” he said.

“Kenyans are simply demanding the reduction of levies and taxes to the level they were before 2023.”

The proposal is anchored on three interventions—restoring taxes and levies to pre-2023 levels, increasing subsidies, and improving transparency in fuel pricing.

Nyoro estimates that eliminating the Sh7 levy, alongside a VAT cut equivalent to about Sh8 per litre and an additional Sh5 billion injection into the Fuel Stabilization Fund, could collectively lower pump prices by Sh27 per litre.

He added that with Kenya consuming about 400 million litres of fuel monthly, increasing subsidies to as much as Sh10 billion in the short term could provide immediate relief.

The MP also criticized the current VAT adjustment as inadequate, calling for a return to the 8 percent rate or a temporary exemption during the current price spike.

Beyond pricing, Nyoro raised concerns over limited transparency in the fuel pricing structure and questioned the government-to-government fuel import arrangement, warning it could distort market pricing.

He further noted that global oil prices have eased to below $100 per barrel from peaks of over $115 in 2022, yet local pump prices remain elevated—pointing to taxation as a key driver.

His remarks follow the latest review by the Energy and Petroleum Regulatory Authority (EPRA), which saw super petrol prices rise by Sh28.69 per litre and diesel by Sh40.30.

The increase has already triggered fare hikes in public transport and higher logistics costs, raising fears of broader inflationary pressure in the coming weeks.