NAIROBI, Kenya, Apr 14- The government has reduced Value Added Tax (VAT) on petroleum products from 16 percent to 13 percent and committed Sh6.2 billion from the Petroleum Development Levy (PDL) Fund in a bid to shield consumers from rising global fuel costs.
In a statement, the Energy and Petroleum Regulatory Authority (EPRA) said the tax relief applies to Super Petrol, Diesel and Kerosene, forming part of broader measures to stabilise pump prices amid sharp increases in international oil markets.
“Effectively, the Value Added Tax rate on Super Petrol, Diesel and Kerosene has been reduced from 16% to 13% in order to cushion consumers from the high landed cost of petroleum products as a result of the escalated prices in the international market,” EPRA noted.
The regulator added that the government will further absorb part of the cost pressures by utilising approximately Sh6.2 billion from the PDL Fund to stabilise prices during the current review period running from April 15 to May 14, 2026.
Despite the intervention, EPRA acknowledged that global price shocks continue to exert pressure on local pump prices.
The average landed cost of imported Super Petrol rose by over 41 percent between February and March 2026, while Diesel increased by nearly 59 percent.
Kerosene recorded the steepest jump, rising by more than 100 percent over the same period.
Kenya relies entirely on imported refined petroleum products, with prices determined by international benchmarks and fluctuations in the exchange rate against the US dollar.
The latest measures come amid heightened volatility in global oil markets, driven by geopolitical tensions and supply chain disruptions, as well as recent turbulence within Kenya’s energy sector following a controversial fuel importation saga.
Industry players have warned that the increase in fuel prices is likely to have a ripple effect across the economy, pushing up transport costs and the price of essential goods.
