Ndindi Nyoro Tables Proposals to Reduce Fuel Prices and Ease Cost of Living

Kiharu MP Ndindi Nyoro has moved to Parliament seeking major reductions in fuel taxes and levies in a fresh push to lower the cost of fuel and ease pressure on Kenyan households and businesses struggling with the high cost of living.

The National Assembly has now formally started reviewing Nyoro’s proposals, which could significantly change how fuel prices are calculated if approved by MPs.

At the centre of the proposals is a plan to cut the Road Maintenance Levy Fund (RMLF) by Ksh 7 per litre, reversing the increase introduced in 2024. If approved, the levy would drop from the current Ksh 25 to Ksh 18 per litre.

Nyoro is also pushing for the complete removal of VAT on petroleum products. Under his proposal, fuel products would be moved from taxable supplies to VAT-exempt products, effectively reducing VAT from the current 8 per cent to zero.

The Kiharu legislator says the measures are meant to offer urgent relief to Kenyans after the latest fuel price review triggered a sharp rise in transport and commodity prices across the country.

“These amendments are short-term measures aimed at reducing the inflationary and sticky economic effects arising from the current high fuel prices,” Nyoro said in his submission to Parliament.

“Our intention is to reduce VAT by 8 per cent and make the products VAT exempt, reduce the Ksh 7 fuel levy added in 2024, reduce the profit margins of importers and distributors, and provide an additional subsidy of Ksh 5 billion for petroleum,” he added.

According to Nyoro, the proposed changes could lower diesel prices by as much as Ksh54 per litre, a move likely to directly affect transport costs, food prices and the cost of doing business. Diesel remains the most widely used fuel in transport, manufacturing and agriculture.

The proposals come just days after the latest review by the Energy and Petroleum Regulatory Authority (EPRA), which pushed pump prices to record levels. In Nairobi, super petrol rose above Ksh 214 per litre while diesel crossed Ksh 242, sparking outrage among motorists, transport operators and businesses.

The increase also triggered complaints from matatu operators and traders, many of whom warned that the higher fuel prices would eventually be passed down to consumers through increased fares and commodity prices.

Nyoro, a former chairperson of the Budget and Appropriations Committee, had earlier written to National Assembly Speaker Moses Wetang’ula seeking the urgent recall of Parliament from recess to debate the fuel crisis.

“Following our proposal to amend various laws to reduce fuel prices, we have written to the Speaker of the National Assembly with a request to recall the House from recess at the earliest,” Nyoro said.

Parliament has since confirmed receipt of the proposals and referred them to the Budget and Appropriations Committee as well as the Departmental Committee on Finance and National Planning for scrutiny.

In a communication dated May 19, Parliament said the proposals would be processed under Article 114 of the Constitution and the National Assembly Standing Orders because they affect public finances.

The committees are expected to question Nyoro on how the government would cover the billions of shillings likely to be lost through reduced fuel taxes and levies, especially funds allocated for road maintenance and infrastructure projects.

Part of the Road Maintenance Levy Fund is already tied to ongoing road construction, repairs and existing financial obligations, meaning any reduction could affect future infrastructure financing.

Economists have also warned that while lowering fuel taxes could immediately reduce the cost of living, it may widen the budget deficit unless the government introduces alternative revenue sources or cuts spending elsewhere.

Still, pressure continues to pile on the government as Kenyans struggle with rising prices of food, transport and basic goods, most of which are directly affected by fuel costs.

Public debate around fuel taxation has intensified in recent weeks, with many Kenyans arguing that taxes and levies now make up a significant portion of pump prices.