Despite a court order delaying the hike, Kenya’s energy regulator has gone ahead and increased fuel prices starting from July 1. This decision came after President William Ruto signed the controversial Finance Bill 2023 into law.
One of the key factors contributing to the upward revision of petrol prices is the Finance Act 2023, which raised the value-added tax (VAT) on petrol from 8% to 16%. As a result, in the capital city of Nairobi, the retail price of a litre of petrol has risen from Ksh182.04 ($1.29) before July 1 to Ksh195.53 ($1.39).
Similarly, the price of diesel has increased from Ksh167.28 ($1.19) to Ksh179.67 ($1.28) per litre, while kerosene now costs Ksh173.44 ($1.23) instead of the previous price of Ksh161.48 ($1.15) per litre.
In a statement released on Friday, the Energy and Petroleum Regulatory Authority (EPRA) stated, “Pursuant to the Finance Act 2023, Value Added Tax (VAT) on super petrol, diesel, and kerosene has been revised from 8% to 16% effective July 1, 2023.”
These new prices are set to be in effect from July 1 to July 14, with a subsequent review of prices to be communicated thereafter.
The introduction of these new prices by the EPRA comes despite a court order suspending the implementation of the Finance Act 2023. A Kenyan senator, Okiya Omtatah, had taken the matter to court, challenging the constitutionality of the Act and its introduction of new or increased taxes.
Judge Mugure Thande acknowledged the urgency of Omtatah’s petition and granted a suspension on the implementation of the new law until the case is heard and determined.
Despite the court’s intervention, Kenya has proceeded with the fuel price hike, causing concern among citizens and raising questions about the adherence to legal processes and the impact on the economy.
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