Sunday, July 09, 2023

Fuel prices in Kenya continue to rise out of control as neighbouring countries enjoy lower and falling fuel prices

Pressure continues from Kenyans over the unbearable fuel prices that continue to climb in Kenya while neighbouring countries enjoy much lower prices.

Road travel from Mombasa to Kigali is more than 1,600 kilometers long.  However, a litre of super gasoline costs more in the port city of Kenya than it does in the capital of Rwanda.

In Kigali, a litre of super gasoline presently costs around Sh183.58 (1,517 Rwandan Francs). In comparison, the cheapest place in Kenya to buy fuel is in Mombasa, where a litre costs Sh192.48.

While fuel is primarily transported by road from Mombasa to Kigali, there are some marketers who may choose to use the pipeline and pick the products up at Eldoret before continuing their journey by road through Uganda to Kigali. Despite the long hours of travel that truckers must put in to get to Rwanda, pump prices in Kigali are still less expensive. 

Rwanda highlighted that lower worldwide oil prices were the cause for the June price declines when analyzing the month's prices. The average price of a barrel of oil on the world market was Sh16,454 ($117.53) in August of last year, but it was just Sh10,700 ($77.66) on Friday. This is a huge decrease over the past and yet in Kenya fuel prices continue to stubbornly point north.

Fuel prices in Kenya are now the highest in the area due to a high tax structure; Rwanda, Uganda, and Tanzania all have petroleum products that are less expensive.

In Dar es Salaam, a litre of gasoline costs around Sh157.40 (TSH2,736), whereas in Arusha, it costs about Sh159.99 (TSH2,781). This is true even though the petrol that is sold in Tanzania is imported in very similar ways to the fuel that is sold in Kenya.

The cost of a litre of super gasoline at the pump in Kampala is Sh190.49. Nearly majority of Uganda's petroleum imports pass through Kenya.

According to tax law specialist Alex Kanyi, "a quick glance at the current prices of petroleum shows that a huge chunk of the pump price goes to the government in form of taxes or levies."

"Petroleum was already heavily taxed, and increasing VAT will push up the tax component significantly, pushing up the price at the pump not by the cost of importing the oil but by the taxes."

Fuel now carries a 16% VAT instead of the previous 8% under the Finance Act of 2023. This has made matters worse for Kenyans because, in addition to driving up fuel prices, it is anticipated that this will raise the price of basic necessities.

And while Epra increased the VAT on fuel in its pricing, the Finance Act's selective application appears to have occurred because the rates that took effect on July 1 did not alter for the Railway Development Levy and the Import Declaration Fees, which were decreased by the Act.

Kenyans already struggled with a high cost of living, and the next round of price increases is projected to make many vital goods and services unaffordable.

Because of the higher gasoline VAT, public service vehicle (PSV) providers have already raised prices.


Crazy BUT true reading;

The saying "the dead don't tell tales" has come to haunt police and a Kakamega town when the body of a lady who had been missing for more than a week was found after its location was revealed in a dream.
The strange episode has reignited the long-running argument over whether the dead may speak to the living and the applicability of "their messages" to those they may have talked to.

Police are unsure of whether to treat the person to whom the revelation was made as a whistle-blower or a suspect as the villagers speculate that the dream may be a testament to the deceased's desire for a proper funeral and her determination to see her killers brought to justice.


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