Nyoro disputes government claims on fuel hike, reveals hidden factors

Kiharu Member of Parliament Ndindi Nyoro speaking on Tuesday, July 15, 2025. /SCREENGRAB

Kiharu Member of Parliament Ndindi Nyoro has strongly criticised this month's sharp increase in fuel prices, terming the government's explanation as misleading and incomplete.

The Energy and Petroleum Regulatory Authority (Epra) on Monday announced new fuel prices, declaring a hike of Sh8.99 for petrol, Sh8.67 for diesel, and Sh9.05 for kerosene per litre.

This brought the retail price of a litre of petrol to Sh186.31, diesel to Sh171.58, and kerosene to Sh155.98 in Nairobi, up from Sh177.32, Sh162.91, and Sh146.93 per litre, respectively.

Speaking on Tuesday, Nyoro questioned the Ministry of Energy's justification that the hike was due to global oil prices, pointing out that the highest global oil prices were recorded last year, not this year.

He attributed the problem to excessive taxation and securitisation of fuel levies, noting that over Sh80 per litre of petrol and Sh76 per litre of other fuels go directly into taxes and levies.

The MP revealed that the government introduced a Sh7 fuel levy last year when global fuel prices were dropping, preventing Kenyans from benefiting from the reductions.

"That is partly one of the reasons the fuel prices are going high," Nyoro said.

He added that the most unfortunate aspect of this development is that the government has allegedly taken the Sh7 fuel levy and used it as collateral to secure Sh175 billion without parliamentary approval.

"This money is not reflecting in the government book as debt, and therefore it can only pass as an illegal debt," Nyoro alleged.

Nyoro claimed the entire arrangement is shrouded in secrecy and called for urgent transparency from the National Treasury, a public audit of all off-book borrowing, and a national conversation on sustainable fiscal management.

"There has been a lot of secrecy around securitisation because these questions we have asked them even in Parliament, even the people in Treasury don't seem to know," he said.

Nyoro posed several questions to the government: what is the source of the Sh175 billion loan, and what is the interest rate?

He also sought to know how much the government will have paid back after the lapse of the seven-year repayment period of the alleged secret loan facility.

"Fourth, is this money sovereign guaranteed because it seems to be nowhere in the government books. It actually also never came to Parliament for any ratification."

The former chairperson of the Budget and Appropriations Committee warned that the government's actions raise serious accountability and legal questions and could compromise Kenya's financial sovereignty.

"The problem we have with this is that the government is spending money in advance. So if Kenyans demand lower fuel prices and you have already taken loans using the levies and taxes, how are you going to alter the pump fuel prices?" he posed.

The recent disruption in the Strait of Hormuz has resulted in increased freight costs as shipping lines take longer routes and pass on the extra costs to end users.

The Strait of Hormuz, a crucial waterway located between Iran and Oman, connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea, has in recent days come under attack as Yemeni Houthi rebels target commercial vessels in retaliation to Israel's attack on Gaza.

Approximately 20 per cent of global oil consumption and 20 per cent of global liquefied natural gas trade pass through the channel daily.

Merchant ships with affiliation to Israel or the US have been major targets.

The result of this development is reflected in Epra's explanation for the sharp fuel price increase in this month's cycle of fuel prices.

Besides the 16 per cent Value Added Tax (VAT), the regulator said the average landed cost of imported super petrol increased by 6.45 per cent from US$590.24 per cubic metre in May 2025 to US$628.30 per cubic metre in June 2025.

It said diesel increased by 6.27 per cent from US$580.23 to US$616.59 per cubic metre, while kerosene rose by 6.95 per cent from US$569.00 to US$608.54 per cubic metre over the same period.