The government has unveiled a new Ksh945 million fuel subsidy and extended tax relief on petroleum products in a move aimed at shielding consumers from a potential rise in fuel prices.
The announcement comes ahead of the Energy and Petroleum Regulatory Authority's (EPRA) release of fuel prices for the July-August pricing cycle later on Tuesday.
Speaking during a press briefing on July 14, Energy and Petroleum Cabinet Secretary Opiyo Wandayi said the government had extended the 8 per cent Value Added Tax (VAT) on petroleum products for an additional three months, pushing the relief to October 2026.
According to Wandayi, the extension will enable consumers to continue enjoying the reduced tax rate while protecting households and businesses from fluctuations in global oil prices.
The CS further announced that the government would utilise Ksh945 million from the Petroleum Development Levy during the July-August pricing cycle to keep pump prices stable.
"As a government, we have invested heavily in building a more resilient petroleum sector. As part of the government's commitment to cushioning households and businesses from international oil market volatility, we have extended the 8 per cent VAT on petroleum products for a further three months until October 2026," Wandayi said.
"Further, in the July-August fuel pricing cycle, the government will deploy subsidies from the Petroleum Development Levy to the tune of Ksh945 million to sustain the current price levels," he added.
Wandayi also dismissed concerns over possible fuel shortages, assuring motorists and businesses that Kenya has adequate petroleum stocks despite ongoing uncertainty in the global energy market.
He attributed the stable supply to the Government-to-Government (G2G) fuel import programme, saying it has allowed Kenya to source fuel from alternative markets and avoid disruptions linked to shipping challenges in the Middle East.
The CS noted that the arrangement, which provides fixed freight and premium charges, has helped keep the landed cost of fuel relatively stable while ensuring a steady supply of petroleum products.
"I therefore wish to reassure motorists and all consumers that there is adequate fuel across the country and that the government remains steadfast in ensuring that that particular situation continues to obtain for the long haul," Wandayi stated.
The government's announcement comes only hours before EPRA publishes its monthly fuel price review, which will set the prices of super petrol, diesel and kerosene for the July-August pricing period.
At present, a litre of super petrol sells at Ksh214.03 in Nairobi, while diesel retails at Ksh202.86 and kerosene at Ksh191.38.
Although the latest measures are intended to maintain current pump prices, Wandayi's remarks suggest that fuel prices could still be adjusted upward or downward when EPRA announces the new rates later today, despite the Ksh945 million subsidy.
