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ECONOMY

Fuel Prices Drop After Government Cut VAT to 8 per cent

1 Mins read

The Energy and Petroleum Regulatory Authority (EPRA) has announced a reduction in fuel prices following a government directive to lower Value Added Tax (VAT) on petroleum products.

In the latest review, the price of Super Petrol has decreased by KSh 9.37 per litre, while Diesel has dropped by KSh 10.21 per litre. The price of Kerosene, however, remains unchanged.

The adjustment follows a directive by President William Ruto, who ordered a reduction in VAT from 13 per cent to 8 per cent for a three-month period. The move is part of broader efforts by the government to cushion Kenyans from the rising cost of living, alongside a Sh6.5 billion intervention fund.

According to EPRA, the revised prices will take effect from April 16, 2026, to May 14, 2026, in line with Legal Notice No. 70 issued by the National Treasury. The regulator noted that the recalculation of pump prices reflects the reduced tax rate.

The VAT adjustment also led to a decrease in kerosene subsidy levels, which dropped from KSh 108.10 per litre to KSh 96.56 per litre.

The price cuts come just a day after EPRA announced sharp increases in fuel prices, with petrol rising by KSh 28.69 per litre and diesel by KSh 40.30 per litre, sparking widespread public outrage.

The earlier hike had triggered threats of protests from angry Kenyans, oppostition leaders and concerns among transport operators, many of whom had already begun increasing fares in response to higher fuel costs.

The government now hopes the latest reductions will ease pressure on households and businesses, even as concerns remain over the sustainability of short-term tax interventions.

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