CS Murkomen Proposes Increasing Fuel Price Ahead of EPRA Review

CS Murkomen Proposes Increasing Fuel Price Ahead of EPRA Review

CS Murkomen Proposes Increasing Fuel Price Ahead of EPRA Review: The Ministry of Transport has proposed to increase the Fuel Levy Charge from the current Ksh18 to Ksh25 per litre, in the current Finance Bill 2024, which is an increase by Ksh7 per litre.

According to Murkomen, The raise is needed to facilitate road maintenance among other infrastructure related activities.

The proposed adjustment is part of the Finance Bill, 2024, and Murkomen underscored the urgency, stating that the current rates have eroded the levy’s purchasing power over time.

The tax, known as the Road Maintenance Levy Fund (RMLF), is applied at the fuel pump, where it stands at Ksh18 per litre of petrol and diesel, with Ksh3 allocated to an annuity fund

Murkomen further explained that the increase noted that the increase could counter the rising maintenance backlog and generate up to Ksh115 billion annually for road improvements, compared to the current Ksh83 billion.

Murkomen stated,”When the fuel levy was last set at Ksh18 per litre in 2016, the pump price of petrol in Nairobi was Ksh95. As of May 2024, the price has soared to Ksh194, while the levy remains unchanged. This stark contrast illustrates the diminishing value of the fuel levy due to inflation,”

At the moment, The Fuel in Kenya is subject to nine different taxes, including a 16 per cent VAT, anti-adulteration levy, excise duty, petroleum development levy, railway development levy, and import declaration fee.

Adding to the complexity, the Energy and Petroleum Regulatory Authority recently reduced fuel prices by up to Ksh18 in their latest review. Currently, super petrol in Nairobi retails at Ksh193.84, diesel at Ksh180.38, and kerosene at Ksh170.06.

Adding the Ksh7 price increase, Kenyans could pay Ksh200 for Super Petrol in Nairobi.

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