Senators call for review of fuel taxes to reduce prices

Tuesday, May 25th, 2021 00:00 |
Pump price. Photo/Courtesy

Senators have stepped in to cushion Kenyans against the consistent increase in fuel prices.

The lawmakers want relevant laws including the Petroleum Act, 2019, Legal Notice No.196 of 2010 and the Legal Notice No. 26 of 2012, reviewed to cushion Kenyans from high taxes and levies.

The Act and notices create the many taxes that have contributed to the high cost of the commodity.

“It does not make any economic sense to invest in a country that has very high costs of production that will eventually eat into profits,” Vihiga Senator George Khaniri said.

“One of the core roles of Parliament is legislation by amending parts of the law that require change,” he added.

Khaniri implored the House, through the Energy committee, to summon Energy Cabinet Secretary Charles Keter and the Energy and Petroleum Regulatory Authority (EPRA) to explain short-term plans to reduce the prices as Parliament mulls long-term measures to rein in the prices.

“A comparison of pump prices of petroleum products across the region reveals that prices in Kenya are the highest in East Africa, higher than even in landlocked countries,” the senator said.

Numerous taxes

“This scenario has two immediate implications. One is the economic hardship to the general public and, two, closure of industries and capital flight. This will in turn lead to slower growth of the economy,” he added.

Taxes and levies paid in Kenya on petroleum products include Sh18 per litre of petrol and diesel as Road Maintenance Levy, Sh5.40 as Petroleum Development Levy and Sh0.25 per litre as Petroleum Regulatory Levy.

Consumers also pay Sh0.95 per litre of petrol as the Railway Development Levy, Sh18 per litre of kerosene as anti-adulteration levy and Sh0.03 per litre as Merchant Shipping Levy.

Import Declaration Fee takes Sh1.65 per litre of petrol while Value Added Tax (VAT) is Sh9.10 for petrol, Sh7.97 for diesel and Sh7.25 for kerosene.

Marsabit Senator Hargura Godana appealed to the government to be sensitive to the plight of ordinary citizens and reduce the taxes. 

He lamented that more than 50 per cent of the cost of fuel is taxes.

“They need to reduce that because they tax a lot and it affects the cost of living of Kenyans. This negates the purpose of tax because the government is supposed to facilitate mwananchi to contribute to the development of the economy,” he said.

Elgeyo Marakwet Senator Kipchumba Murkomen said the ever increasing fuel prices had made life unbearable for most Kenyans.

“I do not know how the common mwananchi is surviving because even us, MPs, who are paid a very good salary, are crying about fuel prices,” he said. 

“We need to encourage more citizens, through public interest litigation, to go to court and stop these orders. How come the EPRA is always increasing the price of fuel?” he asked.

Seven-year high

There has been public outrage in recent months over the high prices of the precious commodity in the wake of the Covid-19 pandemic.

Last week, EPRA increased the price of super petrol by Sh3.56 per litre while that of diesel and kerosene remained unchanged for the period May 15 to June 14.

This was despite a marginal decrease in landed costs of the product.

The Authority revises petroleum products prices that apply across the country on the 14th day of every month.

The price of fuel has risen consecutively over the last few months to a seven-year high. 

A litre of petrol in Nairobi now costs Sh126.37 while that of diesel and kerosene are Sh107.66 and Sh97.85 respectively.

Those in towns far from the port of Mombasa such as Mandera are paying much higher prices.

April reprieve

“Understanding the centrality of petroleum products in the daily lives and the spiral effect of increased petroleum products prices is a big blow to the wananchi.

The world and country is battling the coronavirus disease (Covid-19) pandemic, which has battered the economy and condemned many people to job losses and households to poverty,” Khaniri noted.

In March, Kenyans protested the sharp increase in prices forcing the National Treasury to intervene. This resulted in the retaining of the March prices in April.

“EPRA is performing its statutory duty in publishing the maximum pump price for petroleum products in strict adherence to the legislation enacted by Parliament, notwithstanding the current revenue shortfalls in the country,” Khaniri said.

“However, we still must have this conversation, as it is what the people we represent expect from us.

Nobody should gag or reprimand Kenyans in this discourse as we seek solutions,” the lawmaker added.

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