William Ruto's Gov't Proposes Additional Tax on Fuel as Pump Prices Soars

 

The Ministry of Transport and Roads proposed increasing the road maintenance levy to cater for the rising cost of road construction materials. Which taxes are imposed on fuel? Kenya Roads Boards (KRB) Work Plan proposed an increase in the tax charged on a litre of petrol and diesel by KSh 5.  The KSh 5 increase will raise the road maintenance levy from KSh 18 to KSh 23 per litre of fuel motorists consume. If the law passes, the new charge will take effect in 2025 based on the KRB's plan. The state collected KSh 84 billion in road maintenance levy for 2022-2023. Fuel Levy charge currently stands at KSh 18 per litre of petrol and diesel, with KSh 3 allocated to annuity fund and the balance to road maintenance, rehabilitation and development. "The general increase in KRBF collections greatly enhanced the road maintenance financing resulting in improvement on road condition over the years," read the report in part. Between 2018 and 2019, the government spent KSh 309.74 billion on road maintenance and rehabilitation. KRB said this cost could further increase as a result of the high of construction materials, including bitumen and tar., Expert Rising fuel prices Energy and Petroleum Regulatory Authority (EPRA) revised pump prices to the maximum of KSh 217.34 and KSh 205.47 per litre of super petrol and diesel, respectively. Energy CS Davis Chirchir projected a constant rise in pump prices owing to the market forces controlled by the oil-producing countries. Deputy President Rigathi Gachagua said the Kenya Kwanza government is not to blame for high fuel prices. Global factors affecting fuel prices Gachagua blamed the escalating global dynamics, warning that the escalating Israeli-Hamas war could further raise pump prices. He said if the government introduces the fuel subsidy programme, it will be forced to increase taxes to pay oil marketers. Petroleum Outlets Association of Kenya (POAK) chair Martin Chomba noted that the war indirectly impacts the oil crisis globally. "If this war escalates, there is a likelihood of other producers like Iran, Iraq and Lebanon taking part—a move that might see them forget the oil sector, thus affecting global supply. This is an indirect contribution to the fuel crisis from the war," said Chomba in an exclusive interview with TUKO.co.ke. 

BY Wycliffe Musalia