Govt will do all it can to cushion Kenyans


As you are all aware there has been a lot of concern among Kenyans on the rising cost of fuel and its impact on their wellbeing.

There has also been a debate on what the Government is doing in order to cushion Kenyans from this rise in the prices of fuel.  As we are all aware the rise of fuel in largely due to the high and rising international price of petroleum which we have no control.

However, there are concerns that the high price of petroleum is also due to Government taxes which some people have estimated to be about 50 percent. In this regard, I would like to make the following statement.

*    That the maximum tax on super and regular petrol is only 26 percent of the current pump prices while that of kerosene and diesel is 7.9 and 17.9 percent respectively. This is way below the figures that have been circulating in the media.

*    More importantly fuel taxes have remained constant for a long time close to 10 years.

Taking this into account, it is very clear that the rising price of petroleum is due to the high international prices and NOT government taxes. The high international prices are mainly due to the events that are taking place in oil producing countries and in particular in the Middle East and North Africa which are clearly beyond our control.

But I also want to let Kenyans know the Government is well aware of the suffering that they are experiencing as a result of the high cost of fuel and we are taking some measures to help cushion these adverse effects especially to the low income and poor Kenyans who bear the largest burden.  

In this regard, and working with the Ministry of Energy, the Energy Regulatory Commission, the Kenya Revenue Authority, we have examined the possible measures that we can undertake to  help cushion Kenyans from the effects of the high fuel prices.

Under the law, the Minister for Finance can only vary taxes by a maximum of 30 percent without going to Parliament. In this regard, we have taken measures to reduce excise tax on Kerosene by 30 percent and for diesel by 20 percent.

These measures are effective immediately and will be applicable for the imports whose taxes have not yet been paid.

Going forward, we are also taking measures to remove supply chain constraints which will also have a major impact on the cost of fuel in the medium term.

Let once again assure you that the Government is very aware of the challenges that Kenyans are going through and we will do anything within our means to assist.

Mr Kenyatta is the Minister for Finance.  Follow us on TWITTER @CapitalFM_Kenya

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