Secret levy to raise fuel prices to Ksh103 per litre

The cost of fuel is expected to rise sharply in August when the Energy Regulatory Commission (ERC) is expected to load Ksh6 roads maintenance levy on every litre of petrol.

The roads maintenance levy will be double the Ksh3 per litre increment that Treasury Cabinet Secretary Henry Rotich announced in his June budget statement. With premium petroleum currently priced at Ksh98.59 per litre in Nairobi, adding Ksh6 is expected to take the pump prices to more than Ksh103 per litre.

The Energy Regulatory Commission (ERC) said the double charge is to cover for the late application of the tax whose effective date Transport minister James Macharia gazetted last week and backdated to July 1.

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“We will have the Ksh3 plus the recovery on cargo offloaded between July 1 and 15. I don’t want to speculate but this will definitely increase pump prices,” ERC’s senior manager of petroleum Edward Kinyua said.

The Ksh6 charge will last a month to recoup the revenues missed since the beginning of the month then revert to Ksh3 per litre in mid-September. “We can only effect it in the next pricing. We are allowed to recover the funds through backdating,” Mr Kinyua said.

The ERC did not include the higher roads levy in this month’s review – to the relief of motorists – because the Ministry of Transport had not published a legal notice sanctioning the charges. Kenya imports refined petroleum every month through the open tender system where one oil marketer buys in bulk to supply the rest.

The levy increase, coupled with a weakening shilling against the US dollar, is set to push up petroleum prices by the largest margin in years – piling inflationary pressure on motorists and increasing the cost of transport. The additional Ksh3 pushes the roads levy to Ksh12 per litre.

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