Kenyan fuel prices continue to rank highest across the East African region despite government intervention measures, a comprehensive market analysis has revealed. The Treasury's decision to reduce Value Added Tax from 16 percent to 13 percent has delivered minimal relief to consumers, as parallel increases in other fiscal charges have eroded the intended benefit during the March-April pricing cycle.
Kenyan consumers face a layered taxation structure comprising nine distinct taxes and levies on petroleum products. These charges now constitute as much as 40 percent of the final pump price, effectively negating price stabilisation initiatives and undermining the competitive advantage typically associated with Kenya's major port infrastructure.
The Railway Development Levy has experienced substantial upward adjustments across all fuel categories. Petrol now attracts Sh2.05 per litre under this levy, up from Sh1.43 previously. Diesel users pay Sh2.58 per litre, increased from Sh1.57, while kerosene bears the heaviest burden at Sh3.32 per litre, jumping significantly from Sh1.59 in the preceding cycle.
The Import Declaration Fee, calculated as a percentage of the CIF value encompassing Cost, Insurance, and Freight, has similarly escalated. Petrol imports now incur Sh2.56 per litre, rising from Sh1.79. Diesel imports are subject to Sh3.22 per litre against the prior Sh1.97, while kerosene imports attract Sh4.15 per litre, up from Sh1.99.
The VAT reduction has delivered uneven relief across product categories. Petrol consumers benefit marginally, with VAT now set at Sh24.35 per litre compared to Sh24.59 previously. However, diesel VAT has risen to Sh26.55 per litre from Sh22.97, and kerosene VAT now stands at Sh30.01 per litre against Sh21.07 in the last pricing period.
Beyond these headline figures, additional fiscal impositions continue to burden Kenyan fuel users. Excise duty applies at Sh21.95 per litre on petrol and Sh11.37 on each litre of diesel and kerosene purchased. The Road Maintenance Levy has been revised upward to Sh25 per litre for both petrol and diesel during the 2024-25 financial year, compared to Sh18 previously, though this levy does not extend to kerosene.
Smaller but persistent charges include the petrol regulatory levy at Sh0.75 per litre across all products, anti-adulteration charges at Sh18 per litre on kerosene, and a merchant shipping levy of Sh0.03 per litre applicable to every petroleum product category.
These cumulative tax and levy obligations have elevated landed product costs to Sh107.23 for petrol, Sh133.89 for diesel, and Sh170.86 for kerosene. Storage and distribution charges layer additional costs on top of these figures, compounding the burden carried through to retail pump prices.