By: CORRESPONDENT 3 min read
NAIROBI, Kenya, Oct 16 — President William Ruto has signed into law an extension of the reduced 8 per cent Value Added Tax (VAT) on petroleum products, days after the Energy and Petroleum Regulatory Authority (EPRA) applied the same rate in its latest fuel-price review.
The Tax Laws (Amendment) Act, 2026, empowers Treasury Cabinet Secretary to extend the reduced VAT rate for a further 90-day extension.
Friday’s signing at Eldoret State Lodge comes after EPRA announced new maximum retail prices on October 14, maintaining VAT at 8 per cent for the October 15 to November 14 pricing cycle.
Under the latest review, petrol prices in Nairobi rose by Sh12.93 to Sh226.96 per litre, while diesel increased by Sh9.90 to Sh227.76. Kerosene recorded the steepest adjustment, rising by Sh28.49 to Sh219.87 per litre.
In its October 14 statement, EPRA said the prices were inclusive of VAT at 8 per cent, in line with government policy to cushion consumers against the effects of high international petroleum prices.
The previous relief period had expired on October 14, raising questions about the timing of the extension and the legal provisions governing its implementation.
Pricing debate
EPRA attributed the latest adjustments to increases in the weighted average cost of imported refined petroleum products.
The regulator reported that the average landed cost of imported petrol rose by 11.81 per cent, from US$874.26 per cubic metre in August to US$977.55 in September.
Diesel’s landed cost increased by 11.32 per cent, from US$957.05 to US$1,065.38 per cubic metre, while kerosene rose by 9.41 per cent, from US$1,003.87 to US$1,098.31.
Despite the reduced VAT rate, the increases have renewed concerns over the cost of transport, household energy and essential goods.
The Motorists Association of Kenya (MAK) has demanded an independent audit of the latest fuel-price review and the government’s government-to-government (G-to-G) petroleum import arrangement.
Reacting to EPRA’s price review, the association questioned the relationship between changes in landed costs and the final pump prices, particularly for kerosene, which recorded the largest percentage increase at the pump despite having the lowest reported percentage increase in landed cost.
MAK called on EPRA to publish detailed pricing worksheets showing international benchmarks, landed costs, exchange rates, freight, insurance, taxes, levies, margins and other applicable adjustments.
It also demanded disclosure of the costs and benefits of the G-to-G arrangement, including supplier premiums, financing costs, freight charges and foreign-exchange exposure.
The association argues that consumers should be able to distinguish the effects of international market movements from domestic policy decisions.