Kiharu MP, Ndindi Nyoro has announced plans to introduce legislative amendments aimed at significantly reducing fuel prices in Kenya, warning that the current surge in pump prices could trigger severe inflationary pressure across the economy.
In a notice issued on Friday, the Kiharu MP said he would seek changes to key fuel taxation laws in Parliament to lower the retail cost of super petrol, diesel, and kerosene.
Rising Fuel Prices Raise Inflation Fears
The proposals come at a time when fuel prices have climbed sharply, with petrol retailing at KSh 214.25 per litre and diesel at KSh 242.92 per litre.
Nyoro described the increase as “unacceptable,” arguing that it will hurt households, businesses, and the broader economy in both the short and long term.
At the centre of his proposal is a plan to reduce the Road Maintenance Levy Fund (RMLF) by KSh 7 per litre. The levy currently stands at KSh 25 per litre following an increase introduced in 2024.
Nyoro now wants the levy reduced back to KSh 18 per litre through the revocation of the Road Maintenance Levy Fund (Imposition of Levy) Order, 2024. He is also proposing amendments to the VAT Act to make petroleum products VAT exempt.
Specifically, the MP intends to delete Section 5 subsection 2A of the VAT Act, effectively reducing VAT on fuel products from the current 8% to 0%.
According to Nyoro, reducing VAT percentages alone has not been effective in lowering pump prices because the tax is calculated based on the landed cost of fuel, which has continued to rise.
“The reduction in the percentage of VAT has not done much to reduce pump prices,” he noted, adding that policymakers must stop using fuel prices for political optics while the underlying costs remain high.
Criticism of Government Fuel Pricing Policy
The MP further criticised the government’s handling of fuel pricing, arguing that announcements of price reductions after EPRA’s pricing guidance have failed to provide meaningful relief to consumers.
He said price increases in sectors such as transport often become “sticky,” meaning consumers continue paying higher fares even after fuel costs fall.
Beyond tax changes, Nyoro outlined additional measures he believes could immediately lower fuel prices. These include reducing importer and distributor margins by KSh 4 per litre and allocating an additional KSh 5 billion subsidy for diesel.
If implemented, the proposals would lower the retail price of petrol to KSh 187.38 per litre and diesel to KSh 189.16 per litre, according to the MP.
Nyoro said he will formally initiate the amendment process in Parliament in the coming days as pressure mounts over the rising cost of living in Kenya.
