Kenya Extends 8% Fuel VAT for 90 Days

Kenya, 16 October 2026 - President William Ruto on Friday assented to the Tax Laws (Amendment) Bill, 2026, at Eldoret State Lodge in Uasin Gishu County in a move that signals the government's commitment to stabilise fuel prices.

The law extends the reduced VAT rate on petroleum products, 8% instead of 16%, for another 90 days to cushion Kenyans against high fuel prices.

The law also reforms excise duty on tiles, sanitary ware and glass products. The changes aim to lower construction costs, boost the housing sector and create jobs.

However, this extension by a further 90 days in reality has not completely saved Kenyans, after the Energy and Petroleum Regulatory Authority (EPRA) on Wednesday increased fuel prices for the 15 October to 14 November 2026 period, hours after former Deputy President Rigathi Gachagua had warned Kenyans of a price rise.

Super petrol is up by KSh 12.93 to KSh 226.96 per litre, while diesel is up by KSh 9.90 to KSh 227.76 per litre. Kerosene went up by KSh 28.49 in the latest review. In Nairobi, the new price of kerosene is now KSh 219.87 per litre.

The increases on petrol and diesel are close to the figures Gachagua had cited. In a statement shared publicly, Gachagua, who leads the Democracy for the Citizens Party (DCP), alleged that President William Ruto had directed an increase of KSh 9 per litre on diesel and KSh 12 per litre on petrol. He further alleged that the transaction was routed through Gulf Energy for political purposes.

Cabinet Secretary for Energy and Petroleum Opiyo Wandayi responded to the claims, stating that it is not President Ruto who sets fuel prices. Instead, he said, the mandate lies with the EPRA, which is constitutionally allowed to set fuel prices in Kenya.

He also stated that indeed the Parliament was debating the Bill to further extend 8% VAT on petroleum products for a further 90 days.

“The guy is in hiding in the U.S. He is a one-term MP and there is nothing relevant that he understands,” Wandayi said.

He said Gachagua was only interested in ‘shares’ while serving as Deputy President, before his impeachment.

The increases in the fuel prices has led to Matatu Owners Association to state that they have no otherwise but to increase matatu fares, affecting commuters.

On Thursday, MOA Chairman Albert Karakacha said, "our members have no otherwise except to increase fares."

Separately, the President on Friday also assented to the Kenya Revenue Authority (Amendment) Act, which strengthens the authority’s governance and financing.

"The Kenya Revenue Authority (Amendment) Act strengthens KRA's governance and financing, improving efficiency and revenue collection without increasing taxes," President Ruto stated.