Relief for motorists as fuel prices drop

Motorists can now breathe a sigh of relief after the government announced a slight decrease in fuel prices.

Nairobi motorists will pay Sh2.21 less on a litre of petrol in the latest price revisions by the Energy Regulatory Commission (ERC).

However, the ERC announced a Sh0.39 and Sh0.29 increase in the price of a litre of diesel and kerosene respectively.

The prices include the recent 16 percent value added tax (VAT) imposed on petroleum products.

ERC director-general Pavel Oimeke was however quick to point out the possibility of further revisions on the tax that has led to a public outcry.

President Uhuru Kenyatta on Friday proposed that the VAT be halved.

“The prices are inclusive of value added tax at 16 percent in line with the provisions of the VAT Act 2013. Nevertheless, the commission shall publish new prices whenever the rate of VAT is varied by law,” Mr Oimeke wrote in the price revision notice.

Nairobi motorists will now buy a litre of petrol at Sh125.59, diesel at Sh115.47 and kerosene at 97.70.

FUEL ADULTERATION

ERC gives monthly price revisions considering the weighted average cost of imported refined petroleum products, with the landed cost of petrol said to have dropped 2.33 percent while that of diesel rose by 0.40 percent in August.

The price of kerosene was however increased despite a 0.60 percent drop on its landed cost, perhaps to tame adulteration of fuel.

Before the VAT was loaded on September 1, super petrol was retailing at Sh113.73 while diesel, which is used in heavy machinery and power generation, was retailing at Sh102.74 per litre in Nairobi.

The marginal fall in petrol prices is a relief to motorists who were already overburdened by the heavy taxes on fuel.

ERC’s announcement may quell jitters even as parliament resumes next week to consider the proposal by President Kenyatta to cut the VAT.

REVENUE

Petrol, diesel and kerosene carry a heavy load of levies and taxes, raising hundreds of billions in revenues for the government.

More than Sh60 billion was raised from the consumption of these three products in the first six months of 2016 alone, according to official data.

The levies include road maintenance levy (Sh18 per litre on both diesel and petrol), petroleum development levy (Sh0.40 per litre on all the three), petroleum regulatory levy (Sh0.05 per litre on kerosene and Sh0.12 per litre on petrol and diesel) and railway development levy (Sh0.50, Sh0.52 and Sh0.51 on every litre of petrol, diesel and kerosene respectively).

Meanwhile, the decision by President Kenyatta to reject the Finance Bill, 2018 has elicited sharp reactions from Kenyans.

KENYANS DISAPPOINTED

Speaking to Nation, residents of Migori and Kisumu counties expressed their disappointment on the move by the President to send the bill back to parliament.

Benson Omondi, a barber in Migori Town, said: “I had hopes that the President will come to our rescue but he has demonstrated that he really doesn’t care about the interest of the common mwananchi.”

Migori Woman Representative Pamela Odhiambo urged parliament to rise up to the occasion and save Kenyans. “It is now up to the parliament to stand with the people,” she said.

In Kisumu, Mr Jack Owino, a sugarcane farmer in Chemelil, said: “As sugarcane farmers we are worried because the transporters have increased their prices.”