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Kenya: Pain At The Pump As Fuel Prices Hit A Record High

September 15, 2022

By Samuel Ouma Kenyans will have to dig deeper into their pockets following the hiking of fuel prices, a day after William Ruto's inauguration as the country's fifth President. In a statement, Energy and Petroleum Regulatory Authority (EPRA) said the prices of Super Petrol, Diesel and Kerosene have increased by Ksh20.18 per litre, Ksh25.00 per litre and Ksh20.00 per litre, respectively. This means a litre of petrol is expected to cost Ksh.179.30 in the Capital Nairobi from Ksh.159.12, diesel to cost Ksh.165 from Ksh.140 in August, while a litre of kerosene will retail at Ksh.147. 94 in contrast to Ksh.127.94 previously. The significant price increases have been caused primarily by the removal of the petrol price stabilization mechanism, also known as the fuel subsidy, which had previously protected Kenyans from higher fuel prices. However, fuel subsidies have been partially retained for diesel and kerosene. The prices are inclusive of the 8 per cent Value Added Tax (VA.I) in line with the provisions of the Finance Act 2018, the Tax Laws (Amendment) Act 2020, and the revised rates for excise duty adjusted for inflation as per Legal Notice No.194 of 2020. “The average landed cost of imported Super Petrol decreased by 24.31 per cent from US$l,074.01per cubic metre in July 2022 to US$812.91per cubic metre in August 2022; Diesel decreased by 13.90 per cent from US$l,103.03 per cubic metre to US$949.68 per cubic metre while Kerosene decreased by 19.07 per cent from US$l,111.53 per cubic metre to US$899.56 per cubic metre,” read part of the statement released by EPRA. President William Ruto Tuesday announced the end of fuel and food subsidies, which he described as unsustainable in terms of both consumer and government fiscal operations. "If the subsidy continues to the end of the financial year, it will cost taxpayers Ksh.280 billion, equivalent to the national government development budget. In addition to being very costly, consumption subsidy interventions are prone to abuse, distort markets, and create uncertainty, including artificial shortages of the very products they seek to subsidize," Ruto said.  

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