Kenya could see a sharp drop in fuel prices if a set of temporary tax and levy cuts proposed by Kiharu MP Ndindi Nyoro is adopted, with the legislator calling for a six-month relief plan to cushion households and businesses struggling with high pump prices.
Speaking during a media interview on Tuesday, Nyoro proposed a package of measures targeting petroleum pricing, including scrapping the 8 percent VAT on fuel, reducing oil marketers’ margins, drawing from the Fuel Stabilisation Fund, and lowering the Road Maintenance Levy.
“I am proposing that we reduce our VAT further from 8 percent to zero, which would give motorists relief of around Sh15 per litre for super petrol and about Sh17 per litre for diesel,” Nyoro highlighted.
He explained that the VAT removal would be temporary and place petroleum products under the “first schedule”, meaning they would not attract tax during what he described as a difficult economic period.
“We need taxes, and my proposal is taking care of the dynamism of prices, so it’s not for perpetuity,” he explained.
The former budget chair also pointed to the current distribution margins in the fuel sector, saying importers, wholesalers and retailers together earn about Sh17 per litre, with importers taking about Sh6.
“I requested that we reduce that by four shillings,” he stated, adding that the measure would not require parliamentary approval.
His proposals come at a time when fuel prices have continued to rise, piling pressure on consumers and transport operators across the country.
The latest pricing review by the Energy and Petroleum Regulatory Authority set Super Petrol in Nairobi at Sh214.25 per litre, while diesel rose to Sh242.92, up from Sh206.97 and Sh196.63 in the previous cycle.
The increases followed another adjustment in April, when petrol went up by Sh28.69 and diesel by Sh40.30 per litre, driven by rising global crude oil prices linked to conflict in the Middle East.
The sustained hikes have triggered public concern, transport disruptions and protests, with fares and basic commodity prices rising in many parts of the country.
Public transport operators have continued to push for government action, saying high diesel costs are making operations difficult and pushing up fares.
Nyoro further proposed a reduction of the Road Maintenance Levy from Sh25 per litre back to Sh18, reversing the increase made in 2024.
“My proposal was that we hive off that seven shillings again and go back to the status quo,” Nyoro noted.
He said the combined measures could bring down the price of Super Petrol to about Sh186 per litre.
For diesel, the MP argued that extra support was needed due to its central role in transport, manufacturing and power production.
To address this, he proposed releasing Sh5 billion from the Fuel Stabilisation Fund to ease diesel prices, noting that the fund is financed through fuel purchases.
“Every time you fuel, there is money that goes into that fund, so there is no direct injection of money from the exchequer,” he stated.
Nyoro said Kenya consumes about 200 million litres of diesel and about 135 million litres of petrol every month, based on Kenya National Bureau of Statistics data.
He estimated that using the Fuel Stabilisation Fund could reduce diesel prices by between Sh53 and Sh54 per litre.
He defended the proposals against concerns over revenue loss, arguing that the wider economy would suffer more if fuel prices remain high.
“We have to decide whether we are going to intervene as a country and see whether we can arrest, especially inflationary pressures,” he said. “Or we say let things be and then we bite the bullet.”
He estimated that scrapping VAT on fuel would cost about Sh5 billion in monthly revenue, while reducing the levy would cost about Sh2.5 billion.
“The actual money we are spending as a country is just around Sh7.7 billion,” he said, adding that the Sh5 billion diesel support would be drawn from existing funds in the Fuel Stabilisation Fund.
Nyoro also linked high fuel costs to rising transport fares, food prices and electricity bills, saying households are feeling the pressure on their incomes.
“Anything that takes money out of the pocket of a Kenyan is reducing their disposable income and consequently reducing their welfare,” the MP noted.
He revealed that he had written to National Assembly Speaker Moses Wetang'ula asking for Parliament to be recalled from recess to debate the proposals.
“We needed to do something as the people’s representatives,” he stated. “Beyond coming to these kinds of shows and press conferences, we have actual power that we can exercise.”
Nyoro maintained that Parliament must act quickly to consider practical interventions to ease fuel costs, warning that delays could deepen inflation pressures and economic strain across the country.