NAIROBI, Kenya — A Bill proposing a temporary reduction of Value Added Tax (VAT) on petroleum products from 16pc to 8pc has been formally introduced in the National Assembly, as the government moves to cushion consumers from rising fuel costs.
The legislation, tabled by Majority Leader Kimani Ichung’wah, has undergone its First Reading and has now been referred to the House Finance and Planning Committee for scrutiny.
Under parliamentary procedure, the committee will review the Bill and conduct public participation before it can proceed to subsequent readings and possible enactment into law.
The proposed tax cut would apply for a period of three months, signalling a short-term fiscal intervention aimed at stabilising pump prices amid global oil market volatility.
The move follows public outcry after the Energy and Petroleum Regulatory Authority (EPRA) announced sharp increases in fuel prices for the April–May 2026 cycle.
According to EPRA, Super Petrol rose by Sh28.69 per litre while Diesel recorded a steeper increase of Sh40.30 per litre. Following the adjustment, pump prices in Nairobi now stand at Sh206.97 per litre for petrol and Sh206.84 per litre for diesel.
The price surge has intensified pressure on households and businesses, with economists warning of ripple effects on inflation, transport costs, and the overall cost of living.
The Bill comes a day after President William Ruto announced a series of interventions, including a Sh6.5 billion fuel subsidy and adjustments to VAT, aimed at cushioning consumers from global price shocks linked to supply disruptions in the Middle East.
Policy analysts say the proposed VAT reduction could provide immediate relief at the pump but caution that it may have implications for government revenue if extended beyond the proposed three-month period.
The proposal also aligns with growing calls from stakeholders, including economic experts, for targeted and time-bound fiscal measures to manage the fuel crisis without undermining fiscal sustainability.
The Finance and Planning Committee’s review, including public participation, is expected to attract significant interest from stakeholders, given the broader economic implications of fuel pricing.
As Parliament begins deliberations, attention will focus on whether lawmakers can strike a balance between consumer relief and maintaining government revenue streams in a period of economic strain.
