More pain at the pump as Epra goes against court order, increases fuel prices
Epra factored doubling of VAT on petroleum products, despite court suspending implementation of the Finance Act 2023, to increase fuel prices to record highs.
Motorists will from tomorrow July 1 pay record-high fuel prices after the energy regulator increased prices in defiance of a court order that suspended the increase.
The Energy and Petroleum Regulatory Authority (Epra) on Friday, June 30 announced record fuel prices after the Finance Act, 2023 doubled the value-added tax (VAT) charged on the commodity to 16 per cent from 8 per cent.
Justice Mugure Thande temporarily suspended implementation of the Act until July 5, 2023 when the matter is scheduled for mention, after a case filed by Busia Senator Okiya Omtatah.
Epra, however, defied the court ruling and increased the price of petrol by Sh13.49 per litre, diesel by Sh12.39 per litre and kerosene by 11.96 per litre.
The new prices will see motorists in Nairobi pay a historic Sh195.53 per litre for petrol, Sh179.67 for diesel and Sh173.44 for kerosene in Nairobi.
“The changes in the maximum allowed petroleum pump prices in Nairobi are as follows: super petrol, diesel and kerosene increase by Sh13.49 per litre, Sh12.39 per litre and Sh11.96 per litre respectively,” said Epra Director-General Daniel Kiptoo in a statement.
Sources from the energy regulatory body told Nation.Africa they had not received the court order from the Senator Omtatah case, and were acting based on the provisions of the Act signed into law by President Ruto on Monday.
The authority, internally, also insists that they were not a party to the case, as it only involved Treasury, Parliament, and the Attorney General.
The higher VAT comes at a time fuel is already retailing at a record high after the Kenya Kwanza government fully withdrew the fuel subsidy that had been keeping prices stable for nearly two years.
The higher fuel prices will hit consumers high at a time inflation hit 7.9 per cent in June, according to data released by the Kenya National Bureau of Statistics (KNBS).
The June 2023 Consumer Price Index (CPI) shows that among goods that kept inflation high in the country during the month is sugar with a year-on-year inflation rate of 58.1 per cent, 200kWh of electricity at 53.4 per cent and maize grain at 30.7 per cent.
“A kilo of sugar cost Sh204.76 on average in June 2023, up from Sh129.55 in June last year. The price has also increased by more than Sh10 in June compared to May when it retailed at Sh194.29 on average.
“The inflation was largely due to increase in prices of commodities under food and non-alcoholic beverages (10.3 per cent) and housing, water, electricity, gas and other fuels (9.4 per cent) between June 2022 and June 2023,” KNBS stated.
Kenya’s economy has been struggling over the past 18 months as high inflation – driven by increased costs of fuel, electricity, food and other commodities – and consumers have reacted by reducing consumption.
Data from Epra for instance shows consumption of petrol dropped to 1.50 million metric tonnes in 2022 down from 1.54 million metric tonnes in 2021.
