EPRA Increases Fuel Prices Moments After Court Order

The Energy and Petroleum Regulatory Authority (EPRA) has announced new fuel prices following the doubling of the value-added tax (VAT) on fuel from 8 to 16 per cent. 

The prices on Friday, June 30 were reviewed upward following the implementation of the VAT. Super Petrol thus retails at Ksh195.53 per litre, Diesel Ksh179.67 and Kerosene Ksh173.44 per litre in Nairobi.

"Pursuant to the Finance Act, 2023, VAT on Super Petrol, Diesel & Kerosene has been revised from 8% to 16% effective 1st July 2023. Accordingly, EPRA has recalculated the maximum pump prices that will be in force from 1st to 14th July 2023 taking into account VAT at 16%.

"As a result, the changes in the maximum allowed petroleum pump prices in Nairobi are as follows: Super Petrol, Diesel & Kerosene increase by Ksh13.49, Ksh12.39 and Ksh11.96 per litre respectively," EPRA stated in part.

The price increase, which takes effect from midnight, Saturday, July 1, comes moments after the High Court temporarily suspended the implementation of the Finance Act 2023.

"The purpose of the Petroleum Pricing Regulations is to cap the retail prices of petroleum products which are already in the country so that importation and other prudently incurred costs are recovered while ensuring reasonable prices to consumers. 

"EPRA wishes to assure the public of its continued commitment to the observance of fair competition and protection of the interests of both consumers and investors in the energy and petroleum sectors," the statement by EPRA added.

In Mombasa, super petrol will retail at Ksh192.48, diesel at Ksh176.63 and kerosene will be selling at Ksh170.40 per litre.  

Other cities such as Nakuru and Kisumu saw the price of petroleum products per litre increase. In Nakuru, a litre of super petrol will cost Ksh194.60, diesel will retail at Ksh179.14 and kerosene - Ksh172.93. 

EPRA's announcement as well as the court order suspending the Finance Act generated massive confusion across the country on whether or not EPRA would respect the High Court orders in line with the Act's suspension.

Govt Responds After Finance Act 2023 Suspension By High Court

National Assembly Finance and Planning Committee Chairperson, Kimani Kuria, while speaking to NTV moments after Justice Mugure Thande issued the orders, noted that the government will respect the conservatory orders by the court, thus the government will not review fuel prices with regard to the 16 per cent VAT on petroleum products.

"We respect the Judiciary and we expect the court process to take the lead. We are prepared for a court battle," indicated the Molo MP.

Kuria - whose committee is tasked with reviewing tax policies - added that they considered all legal provisions while reviewing the Finance Bill before it was tabled in Parliament.

"As a committee, we went through all court rulings and we made the decisions based on the previous clauses that were done and we ensured that everything was in order," he stated, adding that they had expected the orders issued in favour of Busia Senator, Okiya Omtatah and other petitioners.

Still, EPRA's statement on Thursday, June 29 is a break from tradition whereby the review of fuel prices is normally announced on the 14th of every month before the new prices take effect from midnight the following day.

The Finance Act 2023 is likely to see petroleum products such as petrol, diesel and kerosene be the first affected by the price increase, with the 8 per cent equivalent to approximately Ksh15, which would be added to the cost of petrol, provided that other factors of supply and demand stay constant.

Regarding the fuel price, owing to the current EPRA prices for the month of June-July among other factors to be taken into consideration while setting new prices, the cost of Super Petrol would likely go from Ksh182.4 in Nairobi to Ksh196.992 by July 2023 and subsequently might shoot to more than Ksh200 in the coming months.