NAIROBI, Kenya June 14 – Parliament has been urged to review the taxes and levies placed on petroleum products so as to cushion Kenyans against the continued hike in pump prices.
Petroleum Cabinet Secretary John Munyes told members of the Senate Energy Committee that the review is the only remedy that will protect Kenyans from being burdened by the continued increase in petroleum pricing in the country.
“There is a role that we need to play in looking at our legislation in how we tax petroleum products. We need to stabilise these fuel prices and that can only be achieved if we regularize and review how the taxing is done,” he told the committee chaired by Nyeri Senator Ephraim Maina on Monday.
Kenya currently places taxes and levies on Super Petrol, Diesel and Kerosene using nine different elements which have been blamed for Kenya’s high cost of petroleum products.
The taxes include – Excise Duty Tax, Road Maintenance Levy, Petroleum Development Levy, Petroleum Regulatory Levy, Railway Development Levy, Anti-adulteration Levy, Merchant Shipping Levy, Import Declaration Fee Levy and Value Added Tax (VAT).
While also citing the prices of international crude as a factor to be blamed for the hike in fuel prices, Munyes stressed that countries such as Rwanda and Uganda have low prices of fuel because of their flexible and easy tax regime.
“We need to do better and save the populace from feeling the heat and it is only through Parliament that Kenyans can be relieved,” he said.
Munyes revealed that his Ministry is in the final stages of operationalising a petroleum consolidated fund that will play a critical role in stabilizing the prices of petroleum products in the country.
“In the long run with the fund we will be able to have stocks and mechanisms of ensuring that the prices do not increase,” he said.
The Fund which is already an Act of Parliament was purposively established to look into the affairs relating to energy and how effectively the prices of fuel can be regulated.
As at May 2021, taxes and levies contributed the highest portion of pump price of Super Petrol and the second greates contributor to the price of Diesel and Kerosene.
But even as the taxes element as admitted by some committee members is partially to blame for Kenya’s high cost of petroleum products, Turkana Senator Imana Malachy wondered why the government is sluggish on utilising the crude oil which is located at his county.
“Why are we still suffering when we have our own petroleum?” he posed as he sought to understand why Kenya is the only country in the East African region that has a high cost of fuel prices.
Energy and Petroleum Regulatory Authority (EPRA) Acting Director General Daniel Kiptoo expressed optimism that once the petroleum development levy gets to be fully operational, the high cost of fuel prices issue will be able to controlled.
“We are ding our best to ensure that Kenyans are cushioned. The Ministry and EPRA have already finalized draft regulations that will provide a governance framework for the petroleum development levy intended for among other functions stabilization of pump prices,” he said.
He noted that the agency was cognizant of the fact that the hike in pump prices was becoming unbearable and noted that was the reason why the prices of Kerosene and Diesel in the March, April and May 2021 were slightly altered.
The agency was on Monday afternoon set to issue new fuel prices.