NAIROBI, Kenya, Oct 17 — The People’s Party of Kenya has proposed cutting petrol prices by Sh29 per litre to Sh197.96 and diesel to Sh198.77, calling for lower industry margins, a Sh5.5 billion subsidy and a reduction in the fuel levy following the latest increase in pump prices.
In a statement released on Saturday, the Ndindi Nyoro-led party criticised the government over the higher prices, proposing three interventions that it says could reduce the cost of fuel without factoring in any further reduction in Value Added Tax (VAT).
The proposals come amid growing scrutiny of the Energy and Petroleum Regulatory Authority’s (EPRA) latest pricing review, which raised petrol, diesel and kerosene prices in Nairobi for the October 15 to November 14 cycle.
Under the new prices, a litre of super petrol retails at Sh226.96, up Sh12.93, while diesel costs Sh227.76, an increase of Sh9.90. Kerosene rose by Sh28.49 to Sh219.87.
The party wants the government to reduce importer and distributor margins by Sh10 per litre, provide a Sh5.5 billion subsidy for petrol and diesel, and cut the Sh7 fuel levy introduced in 2024.
It estimates that the proposed measures would bring petrol prices down to Sh197.96 and diesel to Sh198.77 per litre, representing reductions of Sh29 and Sh28.99, respectively.
The party argued that the increases were coming at a time when the cost of living remained high, citing an inflation rate of 6.8 per cent and calling for interventions to cushion households and businesses.
“It is insensitive for the government to have announced such hikes in fuel prices,” the party said, urging authorities to take measures to ease the burden on consumers and the wider economy.
G-to-G deal questioned
Beyond the proposed price cuts, the party called for the termination of the government-to-government (G-to-G) petroleum import arrangement, arguing that it should give way to competitive market pricing.
It questioned the margins charged under the arrangement, citing an importer’s margin of Sh6.77 per litre and alleging that the figure had increased by Sh2.16.
The party also challenged the latest diesel price adjustment, claiming that its landing cost had fallen from Sh167 per litre in May to Sh138.21 in the current pricing cycle, even as pump prices increased.
It further called for the publication of the investment agreement involving the Dangote East African Petroleum Refinery and disclosure of the refinery’s shareholding structure.
The party also cautioned government officials against interfering with Turkana oil, although its statement did not provide further details on the alleged interference.
The proposals follow similar calls for greater transparency in petroleum pricing by the Motorists Association of Kenya (MAK), which has demanded an independent audit of EPRA’s latest review and the G-to-G petroleum import arrangement.
Motorists demand independent audit
MAK has questioned the relationship between changes in international product costs and the increases passed on to consumers, calling on EPRA to publish the detailed calculations behind its latest review.
According to figures cited by the association, the landed cost of petrol increased by 11.81 per cent, diesel by 11.32 per cent and kerosene by 9.41 per cent.
However, the corresponding pump-price increases were 6.04 per cent for petrol, 4.54 per cent for diesel and 14.89 per cent for kerosene.
The association has questioned why kerosene recorded the smallest percentage increase in landed cost but the largest increase at the pump.
“How does the product recording the lowest percentage increase in landed costs suffer the highest percentage increase at the pump?” MAK asked in its statement.
It also criticised the explanation that the kerosene price adjustment was intended, in part, to narrow the price difference between kerosene and other petroleum products to discourage adulteration.
“Adulteration is an enforcement problem. It must not become an excuse for imposing punitive prices on the poorest citizens,” the association said.
MAK wants EPRA to release the full pricing worksheets, including the benchmarks, landed costs, exchange rates, freight, insurance, taxes, levies, margins and adjustments used to calculate the latest prices.
It has also called for scrutiny of the G-to-G import arrangement and greater transparency in the management of the Petroleum Development Levy Fund.
The association has warned that it could pursue peaceful demonstrations if its concerns are not addressed.
Neither the party’s proposals nor MAK’s questions, however, establish that EPRA’s calculations were incorrect. An independent audit and disclosure of the underlying pricing data would be needed to assess the claims.
Proposed subsidy and levy cuts
The People’s Party estimates that a Sh5.5 billion subsidy for petrol and diesel, based on monthly consumption of approximately 450 million litres, would lower prices by about Sh12 per litre.
It also wants the Sh7 fuel levy introduced in 2024 removed, alongside the proposed Sh10 reduction in importer and distributor margins.
The party cited a current-year subsidy allocation of Sh21.5 billion and argued that the Petroleum Development Levy Fund should be applied to help reduce pump prices.
The government has maintained the reduced 8 per cent VAT rate on petroleum products through a further 90-day extension signed into law by President William Ruto on October 16. EPRA had already applied the 8 per cent rate in its latest pricing cycle.
The People’s Party’s proposed reductions are separate from that VAT relief and would require additional measures to lower prices further.