Sakaja proposes automatic fuel tax suspension above Sh200 pump price

When fuel prices continue to weigh heavily on households and businesses across the country, Nairobi Governor Sakaja Johnson has floated a new idea aimed at easing the burden, suggesting a system where fuel taxes would automatically be switched off once pump prices climb above Sh200.

Speaking on Wednesday, he said the current approach to fuel pricing does not respond well to sudden spikes in global oil markets, leaving consumers exposed whenever international costs rise sharply. He argued that a more responsive model is needed to prevent fuel from becoming unaffordable for ordinary Kenyans.

According to him, the country should consider a pricing structure that adjusts automatically depending on market conditions, ensuring that taxation does not push retail fuel prices beyond a set limit.

“If we sit down and think critically, we can find a solution,” Sakaja said.

He proposed that fuel taxes should only be applied when pump prices are at Sh200 or below, saying that once prices move beyond that point, the taxes should be temporarily removed.

“We can introduce price capping where taxes on fuel only apply when pump prices are Sh200 and below. If prices rise above that level, the taxes would be suspended,” he said.

Sakaja maintained that the intention is not to deny government revenue, but to ensure taxation does not worsen already high living costs during periods of global fuel price increases.

“Our role as government is to create a formula ensuring that the landing cost of fuel, together with taxes, does not push pump prices beyond Sh200,” he stated.

He added that the government would still collect fuel taxes during periods when global prices are stable and import costs remain low, meaning the system would only shift during price surges.

The governor further explained that the suspension of taxes would act as a cushion whenever international fuel prices spike and threaten to push pump prices above the set threshold.

“If higher landing costs combined with taxes would push fuel prices above Sh200, the taxes should be suspended to cushion wananchi. That is my suggestion on the fuel issue,” Sakaja added.

His remarks are expected to spark debate on how the government can balance revenue collection with the rising cost of living, especially at a time when fuel prices continue to drive up transport and food costs across the country.