By Benadeta Mwaura - Reporter
Kenya , May 15, 2026 - Kiharu MP Ndindi Nyoro is calling for sweeping fuel tax reforms, arguing that Kenya can significantly lower pump prices by reducing Value Added Tax (VAT), scrapping some fuel levies and increasing subsidies from the Fuel Stabilisation Fund.
The proposals come amid growing public frustration over the rising cost of fuel, which has continued to push up transport fares, food prices and the general cost of living across the country.
According to Nyoro, the government should immediately move to lower taxes and charges imposed on petroleum products, insisting that the current pricing structure is placing unnecessary pressure on households and businesses.
In his proposal, Nyoro called for the removal of the Sh7 fuel levy introduced in 2024, arguing that it has contributed heavily to the recent spike in pump prices.
He also proposed reducing VAT on fuel products, saying the government should go beyond the recent adjustment and fully cushion consumers during the current economic pressure.
“The drastic increment in fuel prices is unacceptable; a more humane variation must be made by reducing the pump prices now,” Nyoro said while reacting to the latest EPRA fuel review.
The legislator further argued that the government should increase the amount released from the Fuel Stabilisation Fund, noting that the fund reportedly holds over Sh20 billion.
According to his calculations, releasing an additional Sh5 billion in subsidies could lower fuel prices by approximately Sh12 per litre.
Combined with VAT cuts and levy reductions, Nyoro estimates the interventions could reduce fuel prices by as much as Sh27 per litre, potentially bringing petrol prices below Sh190 in some parts of the country.
His remarks come after the Energy and Petroleum Regulatory Authority (EPRA) announced steep increases in fuel prices for the April-May pricing cycle. Super petrol rose by nearly Sh29 per litre, while diesel increased by more than Sh40, triggering concerns among consumers and businesses already struggling with inflationary pressure.
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Nyoro also questioned why fuel prices remain elevated despite global oil prices being lower than they were during the 2022 energy crisis.
“Kenyans should take note that global oil prices were higher in 2022, topping $115 per barrel in May, yet pump prices never exceeded Sh160 per litre of petrol and Sh140 per litre of diesel locally,” he said.
The MP additionally raised concerns over transparency within the government-to-government fuel importation arrangement, suggesting that the structure requires greater public accountability.
“Can the leadership of the country come clean on the business dealings they are doing, hiding under G-to-G? The arrangement is a scam and a profit machine for leaders,” he claimed.
The debate over fuel taxation has become increasingly political because fuel prices affect nearly every sector of the economy. Higher fuel costs directly translate into more expensive transport, manufacturing, electricity generation and food distribution, ultimately raising the cost of living.
Kenya currently imposes multiple taxes and levies on fuel products, including VAT, the Road Maintenance Levy, Petroleum Development Levy, Railway Development Levy and anti-adulteration charges.
Industry players and economists have repeatedly argued that taxes now account for a substantial portion of pump prices.
The government has, however, defended some of the tax measures as necessary for financing infrastructure development and stabilizing public finances amid rising debt obligations.
Nyoro’s proposal now adds to growing pressure on the Treasury and energy regulators to rethink Kenya’s fuel pricing formula, especially as households continue to grapple with shrinking disposable incomes and persistent inflation.