Relief as govt lowers duty on kerosene, diesel

April 18, 2011 12:00 am

, NAIROBI, Kenya, Apr 18 – The government has finally intervened after a public outcry over the spiralling cost of living by reducing excise duty on kerosene by 30 percent and that of diesel by 20 percent.

This will come as a relief to many Kenyans who were bracing for hard times ahead as fuel and food prices soar.

The announcement means that the cost of diesel and kerosene is now expected to come down in the next few days since the measures will only apply to those imports whose taxes have not yet been paid for.

"I want to let Kenyans know that the government is well aware of the suffering that they are experiencing as a result of the high cost of fuel and that is why we are taking these measures to help cushion them from the adverse effects especially to the low income earners," Finance Minister Uhuru Kenyatta told a press briefing after a day-long meeting with officials from the Energy Ministry, Kenya Revenue Authority and Energy Regulatory Commission (ERC).

This announcement comes hours before a planned mass demonstration organised by the Central Organisation of Trade Unions and other civil society activists to protest high costs of living.

Mr Kenyatta was however quick to point out that the announcement was not a knee-jerk reaction to the protests but a measure aimed at alleviating suffering on especially poor Kenyans.

Motorists in Nairobi have since April 15 been paying Sh111.17 per litre of petrol with those in Mandera purchasing the commodity at Sh123.69, since the ERC revised the prices in line with the fuel price control regulations of 2010.

With this change, it was not immediately clear by what margin the cost would fall but the ERC pledged to work out the prices in the next few days.

And while these recent developments will not be felt by motorists who use petrol, it will be beneficial to the productive sectors of the economy such as agriculture, industries and transport and it\’s expected to have the multiplier effect of lowering and food and transport cost.

The minister acknowledged that revenues will be impacted negatively but emphasised that the primary objective was to cushion a majority of Kenyans.

"Of course it will affect what we had hoped to raise but we will have to find ways to survive but ultimately we are doing what we can to alleviate the pressure that we know that the ordinary Kenyan is going through," he stated.

Mr Kenyatta further dispelled reports that the increment in the pump prices was as a result of a rise in taxes levied on fuel and clarified that the taxation aspect has remained constant at Sh28.50 per litre.

The Treasury has been on the receiving end with many people erroneously saying that taxes levied on fuel were above 50 percent of the total costs, a scenario was interpreted as being insensitive to the plight of Kenyans.

Present at the press briefing was Energy Minister Kiraitu Murungi who appealed to all fuel retailers to reduce their margins and pass on the benefits to the consumers.

While reiterating that the increment was due to the unrest in Middle East and part of the North African countries, he said the situation was not permanent and fuel prices would stabilise once the situation in those countries improved.

"Please let us not politicise this issue. I will be happy to meet with all stakeholders because what we need is an understanding. I don\’t think that mass action is going to bring down the international oil prices," Mr Murungi appealed.

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