EPRA to announce new fuel prices as 16 per cent VAT takes effect

EPRA to announce new fuel prices tomorrow as 16 per cent VAT takes effect.

The Energy and Petroleum Regulatory Authority (EPRA) will announce new pump prices on Friday, June 30.

This follows the enactment of the Finance Bill, 2023 into law, which introduces a 16 per cent VAT on petroleum products.

Ordinarily, EPRA announces changes in fuel prices on the 14th of every month.

With the increase of Value Added Tax (VAT) on petroleum products from 8 to 16 per cent, fuel prices are set to increase.

Industry players suspect this will result in an increase of over Sh12 per litre of diesel and super petrol.

The National Assembly's Committee on Finance and Planning said it had weighed the good and the bad of doubling VAT on the economy and made a decision that the positives outweigh the negatives, backing the National Treasury's proposal to increase the taxes.

"The committee noted that the existing VAT rates were not standard and thus intended to harmonise the rate to 16 per cent including for petroleum products. It also agreed that the effect of the differential VAT on fuel led to petroleum distributors being in a constant credit position, thus leading to high expenditure for the government. The committee rejected the proposal (opposing the introduction of 16 per cent VAT on fuel)," said the Committee in its report on the Finance Bill, noting that the proposal was among the most unpopular in the Bill.