Kiharu MP Ndindi Nyoro/FILE
Kiharu MP Ndindi Nyoro has proposed a series of temporary tax cuts and fuel subsidies that he says could significantly reduce fuel prices and cushion Kenyans from the rising cost of fuel.
Nyoro said the government should intervene immediately to lower the cost of diesel and petrol, warning that failure to act could have severe economic consequences.
According to the Kiharu MP, petrol was retailing at about Sh214 per litre while diesel stood at approximately Sh243 per litre as of Monday morning.
Speaking on Tuesday, the Legislator said diesel required urgent attention because it affects multiple sectors of the economy beyond transport.
“I thought there is something we can do to reduce those prices. One proposal actually focused on diesel because diesel is used across many platforms, not just transportation.I thought it was important to reduce diesel by around Sh54,” he stated during an interview on NTV.
Nyoro outlined a three-part proposal that he said would lower fuel prices without placing excessive strain on public finances.
The first proposal involves reducing the profit margins earned by importers, retailers and wholesalers in the petroleum supply chain.
“Their margins come to around Sh17, but out of that, around Sh6 goes to importers. My request was that we reduce that by Sh4. That doesn’t need any parliamentary process,” he said.
The second proposal calls for the temporary removal of Value Added Tax on fuel products by reducing VAT from 8 per cent to zero.
“That would give us a reprieve of around Sh15 for super petrol and around Sh17 for diesel,” Nyoro said.
He also proposed reversing a Sh7 increase in the Road Maintenance Levy Fund introduced in 2024, which raised the levy from Sh18 to Sh25 per litre.
According to Nyoro, the combined measures would push the price of super petrol below Sh190 per litre.
“That already pushes the price of super petrol to below Sh190, to around Sh186 thereabout,” he said.
However, he said diesel prices would still require additional intervention through the fuel stabilisation fund.
Nyoro proposed using an additional Sh5 billion from the fund to subsidise diesel prices, arguing that the money already exists and does not require borrowing from the Exchequer.
“The fuel stabilisation fund is basically a harambee done by Kenyans through fuelling. Every time you fuel, there is some money that goes into that fund,” Nyoro said.
He explained that Kenya consumes around 200 million litres of diesel every month compared to approximately 135 million litres of petrol, according to data from the Kenya National Bureau of Statistics.
“So if we subsidise diesel using that Sh5 billion, then it pushes the reduction to around Sh53 to Sh54 for diesel,” he said.
Nyoro, who previously chaired the National Assembly Budget Committee, defended the proposal against accusations of populism, insisting it was a temporary intervention aimed at protecting the economy during a period of unusually high global oil prices.
“I understand that Kenya needs these revenues. I’m not doing it for populism’s sake. My proposal is taking care of the dynamism of prices, so it is not for perpetuity.”
He suggested the measures should remain in place for between four and six months as the government monitors global geopolitical developments and oil prices.
Nyoro warned that the economic cost of failing to intervene could outweigh the short-term revenue losses from tax cuts and subsidies.
“The effects on the economy are enormous. Yesterday alone, we could have been talking about tens of billions of shillings lost to the economy,” the MP said.
He argued that rising fuel prices would trigger inflationary pressure, reduce disposable income, and hurt household welfare, especially through increased transport costs.
“Anything that takes money out of the pocket of a Kenyan reduces their disposable income and consequently reduces their welfare,” Nyoro said.
