Oil marketers warn of expected fuel hike

July 18, 2013
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The marketers say the Energy Regulatory Commission (ERC) did not take into account the new 1.5 percent levy on importation of crude oil during the June 14 monthly fuel review which may lead to the marketers making losses/FILE
The marketers say the Energy Regulatory Commission (ERC) did not take into account the new 1.5 percent levy on importation of crude oil during the June 14 monthly fuel review which may lead to the marketers making losses/FILE
NAIROBI, Kenya, July 18 – Kenyans will from next month start feeling the heat of the new tax levy on imported goods, after oil marketers expressed fears of a fuel hike in the next month’s fuel review.

The marketers say the Energy Regulatory Commission (ERC) did not take into account the new 1.5 percent levy on importation of crude oil during the June 14 monthly fuel review which may lead to the marketers making losses.

Total Kenya Managing Director Alexis Vovk said the marketers’ losses may have to be considered in the next month’s review hence leading to higher fuel prices.

KRA started implementing the levy on all imported goods starting July 1 to collect funds aimed at financing the construction of standard gauge railway between Mombasa and Kisumu.

“It’s a loss of 1.5 percent on our turnover because we have to absorb the cost at the moment. But we are confident that ERC will consider this in the review,” Vovk told Capital FM business.

If ERC decides to factor in the levy on August 14, this cost is expected to be passed on to Kenyans.

However on its part, KRA says there is need for consultation between ERC and oil marketers to ensure that the burden of the extra cost brought about by the new levy is not fully shouldered by Kenyans who continue to face the challenge of high cost of living.

“There has been a hitch in implementing this and I think the error is not our side but on the side of ERC and I believe it will be sorted out,” KRA Commissioner General John Njiraini told journalists while releasing 2012-2013 full year revenue collection on Wednesday.

“As a private company, when we have commercial developments, we invite all stakeholders to address their concerns. So we wish to tell the government, that when they are making decisions, invite all everyone before implementation to avoid mishap,” Vovk urged.

In the July review, the price of super petrol went up by Sh1.34, to retail at Sh109.53 in Nairobi and diesel by Sh3.70 to Sh102.86.

However kerosene dropped by Sh2.30 to at Sh79.49.

The new levy is also expected to impact on other imported items including second-hand clothes food items and vehicles.

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