While government has cut VAT, Railway Development Levy and IDF have gone up Kenya's fuel prices remain the highest in the region despite the government's intervention and port advantage, a market analysis shows. The government's move to cut VAT from 16 per cent to 13 per cent has not had major impacts as the amounts payable remain higher compared to the March-April cycle.
Kenyan consumers pay a total of nine different taxes and levies, some which have gone up, wiping out gains from other adjustments and price stabilisation moves. Taxes and levies account for up to 40 per cent of the final pump prices. Railway Development Levy has gone up to Sh2.05 per litre of petrol from Sh1.43, diesel’s levy has gone up to Sh2.58 from Sh1.57 while RDL on kerosene has jumped to Sh3.32 per litre from Sh1.59.
Import Declaration Fee (calculated on a percentage of the CIF value (Cost, Insurance, and Freight), has gone up to Sh2.56 from Sh1.79 per litre of petrol, Sh3.22 on diesel from Sh1.97 and Sh4.15 on kerosene up from Sh1.99. The VAT reduction has only reduced amount payable on petrol where a litre now attracts Sh24.35 as VAT compared to Sh24.59 in the last cycle.
Those of diesel and kerosene remain higher at Sh26.55 per litre and Sh30.01, respectively, compared to the last prices where a litre of diesel attracted VAT of Sh22.97 while kerosene was Sh21.07. Kenyans also pay excise duty at Sh21.95 per litre of petrol and Sh11.37 on every litre of diesel and kerosene bought.
Road maintenance levy is charged at Sh25 per litre of petrol and diesel, having gone up from Sh18 during the 2024-25 financial year. It is not charged on kerosene. Petrol regulatory levy is at 75 cents per litre of each product bought, anti-adulteration is charged at Sh18 per litre of kerosene, while merchant shipping levy is at Sh0.03 per litre of every petroleum product.
These taxes and levies pushed up the product costs (landed costs), which were at Sh107.23, Sh133.89 and Sh170.86 for the three products, with other charges being storage and distribution costs.