Rising international levies push petrol price higher

Petrol prices have increased for the second month in a row on rising global oil prices and consumers should expect more pain at the pump in coming months as higher fuel taxes come into force.

Petrol is up Sh1.92 a litre to Sh86.17 in Nairobi while diesel, which is mainly used to power trucks, buses and industrial machinery, has increased by Sh3.34 to Sh73.71 a litre.

The pump prices will be in place for the next one month.

Kerosene, mainly used by poor homes for lighting and cooking, is up by Sh3.82 to Sh50.80, the Energy Regulatory Commission (ERC) data shows.

New tax

Motorists should be prepared to dig deeper into their pockets with the expected coming into effect of a higher road maintenance levy that Treasury raised from Sh12 per litre of diesel or petrol to Sh18 in the budget for the financial year starting July.

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Kerosene users will bear the cost burden of Sh7.20 a litre that has been introduced as excise duty to discourage oil marketers from mixing it with diesel in pursuit of higher margins.

Kerosene was previously zero-rated and is not charged the roads maintenance levy, making it cheaper.

“In calculating the maximum allowed pump price for kerosene, the commission did not take into account the recently increased excise duty due to the fact that the cargo that was used in the computations completed product discharge on May 30 whereas the new excise for kerosene was effective from June 10,” the ERC said in a statement.

“In regards to changes in the road maintenance levy that was proposed in the 2016/17 budget, the commission is in consultation with the Kenya Roads Board and the Kenya Revenue Authority to establish the implementation date.”