5 October 20262 min read

Fuel’s 8% VAT is due to end on 14 October

The cut that took VAT on petrol and diesel from 16% to 8% runs out the day EPRA sets November’s prices. Here is how much of every litre it is worth.

A fuel pump nozzle resting in its holder at a petrol station — Photo: Michael Pointner on Unsplash

Ksh 16.14

of every litre of diesel is VAT at today’s 8% rate

Pump prices did not move in September. EPRA’s review for 15 September to 14 October kept a litre in Nairobi at Ksh 214.03 for super petrol, Ksh 217.86 for diesel and Ksh 191.38 for kerosene - the same as the month before.

What may move them is the date the cycle ends. Since April, VAT on petrol and diesel has been 8% instead of the usual 16%. In July the government extended that cut to 14 October. That is also the day EPRA announces prices for the next month, so two things land at once: the regular review of what fuel costs to bring in, and the tax rate.

What the 8% is worth

At today’s prices, VAT is about Ksh 16.14 of each litre of diesel and about Ksh 15.85 of each litre of petrol. If the rate went back to 16% and nothing else changed, the same litre of diesel would cost about Ksh 234.00 and petrol about Ksh 229.88.

That is arithmetic, not a forecast. EPRA’s review also reflects what the fuel cost to import that month, and the government can extend the cut again. Nobody has said which way it will go, and we are not guessing.

A litre in Nairobi: today, and the same litre at 16% VATKsh per litre

Today, at 8% VATSame price at 16% VAT

Diesel+16.14: 217.86
234.00
Super petrol+15.85: 214.03
229.88

Our arithmetic on EPRA’s 15 September prices, with nothing changed but the VAT rate. The real prices from 15 October will also reflect EPRA’s review of import costs.

Why it matters

Diesel moves most goods in Kenya and runs most standby generators, so the decision reaches delivery costs and factory running costs within days.
For a delivery van using 40 litres a day over 26 working days, about Ksh 16,800 a month rides on whether the 8% rate continues.
Transport and supply prices agreed before 14 October may need a second look once the new pump prices are out.
This article will be updated when EPRA publishes the new prices.

Share this story

Know someone who should read this?