Kiharu Member of Parliament Ndindi Nyoro has called for an urgent overhaul of Kenya’s fuel pricing structure, claiming that the government can immediately lower petrol prices to approximately KSh 188 per litre.
Speaking from his office on 15 May 2024, the MP held a press conference to address the latest price reviews by the Energy and Petroleum Regulatory Authority (EPRA).
The briefing followed a significant hike where petrol rose by Ksh 16 to retail at Ksh 214, and diesel jumped by Ksh 46 to reach Ksh 242 per litre. Nyoro described the new rates as a "shocker" that would inflict long-term damage on the Kenyan economy.
The Three-Step Plan to Lower Prices
Nyoro outlined a specific legislative and fiscal strategy to bring the pump price of super petrol down to around Ksh 186 and diesel to approximately Ksh 189. His proposal focuses on three main areas:
- VAT Exemption: The MP is seeking to move petrol, diesel, and kerosene to the first schedule of the VAT Act, making them entirely VAT exempt. He argued that the previous reduction to 8% was ineffective because it was calculated on a rising base cost.
Ndindi Nyoro // Facebook - Scrapping the Road Maintenance Levy: Nyoro intends to amend the law to abolish the Ksh 7 increase added to the Road Maintenance Levy in 2024.
- Reducing Profit Margins: He proposed cutting the current distribution and importer margins—which stand at roughly Ksh 22—by Ksh 4 per litre.
To specifically address the record-high diesel prices, Nyoro called for the government to provision Ksh 5 billion from the Fuel Stabilization Fund. He stated this would allow for a further reduction of Ksh 24 per litre for diesel.
"Kenyans cannot accommodate global supply shocks and also accommodate your greed at the same time; one has to give way for the other."
Questioning the 'G2G' Deal
A central theme of Nyoro’s address was the criticism of the Government-to-Government (G2G) oil deal. He labelled the arrangement a "scam" and a "kiosk for senior government officials," claiming that 75% of fuel imports directly benefit certain leaders.
Nyoro noted a paradox in current pricing: global oil prices were higher in 2022 than they are now, yet Kenyans paid less at the pump back then without the G2G deal in place. He further alleged that the current fuel in the country is of lesser quality with higher sulfur content, which should technically result in lower landed costs.
A Regional Comparison
The MP highlighted that Kenya now has the highest fuel prices in the region. He pointed out that landlocked neighbours like Uganda and Rwanda, which use Kenyan ports, are retailing fuel at lower rates.
"Ethiopia’s super petrol and diesel are actually below Ksh 150," Nyoro said, questioning why Kenya’s landed cost of below Ksh 120 per litre ends up costing the consumer over Ksh 200 due to nearly Ksh 100 in taxes, levies, and margins.
Legislative Action
Nyoro confirmed he has already written to the Clerk of the National Assembly to initiate amendments to the VAT Act and the Road Maintenance Levy Fund. He warned that if the government does not act, the inflationary pressure will cost the economy hundreds of billions of shillings.
The MP concluded by stating he would require fellow lawmakers to sign a public register to show whether they stand with struggling Kenyans or the current pricing regime.
