Kenya considers tax cuts to address rising fuel costs

The government is evaluating additional strategies to protect Kenyans from continuously increasing fuel prices, with petroleum costs continuing to strain households and businesses nationwide. Addressing an Orange Democratic Movement (ODM) gathering at Urudi Primary School in Nyakach, National Treasury Cabinet Secretary John Mbadi indicated that the administration was investigating further steps, such as additional tax modifications and fuel stabilization initiatives, to alleviate consumer burden. Mbadi disclosed that the government had already allocated billions of shillings recently to shield Kenyans from international fuel price fluctuations, though he acknowledged these measures had not completely controlled the escalating costs. “We face challenges in the Middle East leading to fuel shortages, and prices have risen significantly. Last month we made substantial efforts allocating Sh. 6.2 billion to stabilize fuel prices and reduced VAT by eight percent,” explained Mbadi. “This month we have allocated another Sh. 5 billion to maintain fuel price stability. However, prices remain elevated,” he continued. The Treasury official mentioned plans to consult with President William Ruto on potential strategies aimed at reducing petroleum product costs. “Our approach involves meeting with the President to explore all necessary measures to decrease petroleum prices, ensuring our citizens are not burdened by increasing costs,” he stated. Mbadi defended the administration against criticism regarding rising fuel expenses, emphasizing that the situation was international rather than specific to Kenya. He referenced the United States, one of the globe’s major oil producers, noting their fuel prices had also increased substantially. “Even in the United States, where they produce their own fuel, petroleum product prices have risen by 60 percent. This trend is global. However, we must take decisive action domestically,” he emphasized. The Cabinet Secretary also warned politicians against using the fuel crisis for political purposes, stating the issue required serious discussion and unified solutions. “This matter should not be politicized. It requires thoughtful discussion and debate among leaders and those in authority to examine all available options,” he said. Among potential approaches, Mbadi indicated further review of VAT on petroleum products and securing additional funds for fuel stabilization. “Another possibility is securing more resources to stabilize petroleum commodity prices,” he noted. ODM National Chairperson and Homa Bay Governor Gladys Wanga also contributed to the discussion, advising Kenyans to be patient as the government develops long-term remedies. Wanga characterized the increasing fuel prices as part of a broader global economic issue affecting numerous countries and reassured citizens that the government was dedicated to protecting vulnerable households from the crisis’s impact. Escalating fuel expenses have led to higher transportation fares and increased costs for essential goods, intensifying cost-of-living worries for Kenyans already facing high inflation and financial difficulties. Persistent high fuel prices are expected to further increase production and food expenses, with widespread effects across critical economic sectors.