•Energy authority shifts blame to the Kenya Revenue Authority for high fuel prices
•Director general Oimeke says 5.15 per cent excise duty led price rising
The Energy and Petroleum Regulatory Authorityhas blamed the Kenya Revenue Authority for the increase in fuel prices.
Director general Pavel Oimeke said the 5.15 per cent adjustments of excise duty by the taxman led to the increase in prices witnessed last month.
“The adjustment increased the excise duty on super petrol by Sh1.02 per litre while the diesel and Kerosene increased by Sh0.53 per litre respectively,” he said.
KRA made the adjustment through gazette notice Number 109 of July 2019. Oimeke spoke on Thursday when he appeared before the Senate’s Energy Committee to explain the skyrocketing fuel prices.
On July 14, the authority announced new retail pump prices of petroleum products for the period ending August 14. The price of super petrol increased by Sh0.29 per litre while diesel and kerosene decreased by Sh0.88 and Sh2.31 per litre respectively.
Oimeke told the Nyeri Senator Ephraim Maina -led the committee that had the taxes and levies been maintained, pump prices of super petrol would have dropped by Sh0.73 per litre, diesel by Sh1.41 per litre and Kerosene by Sh2.83 per litre last month.
He, however, explained that there was no sharp increase in the pump prices because the landing cost of imported petroleum decreased during the month.
Landed cost of super petrol decreased by 1.83 per cent from Sh55, 469.43 per cubic metre in May to Sh54, 384.37 in July.
That of diesel decreased by 3.07 per cent from Sh55, 164.73 from Sh53, 471.20 and that of kerosene dropped by 5.49 per cent from Sh55, 164.73 to Sh53, 471.20
The Senators described the decision to introduce the levy as sadistic and cold, warning that it has made life difficult for the ordinary people.
They questioned the many taxes and levies imposed on fuel products, adding that the move is contributing to the high pump prices.
Senator Maina cited the anti-adulteration levy which was introduced last year to check cartels who mix either petrol or diesel with kerosene and sell to unsuspecting motorists. He said it is unnecessary as it is burdening the taxpayers.
But Oimeke told the committee it was EPRA that advised the government to introduce the anti-adulteration levy as a way of managing the quality of fuel sold to the public at the pump.
“The levy was necessary to manage the quality of fuel sold in Kenya. Some Kenyans were getting rich by selling bad fuel to the public,” he said.
The remarks elicited anger from committee members, who accused the regulator of sacrificing Kenyans at the altar of powerful cartels responsible for the adulteration.
"The question at play is not just financial but also environmental. How did you conclude that the solution to the adulteration was through tax?” Migori Senator Ochillo Ayacko posed.
Maina said kerosene is for the low class and wondered why the regulator failed to curtail the cartels in the oil sector and instead chose to punish the public through the levy.
“The government should have dealt with the cartels and the poor left to live their lives,” Maina said.
The senator further dismissed the statistics EPRA provided on the decline in consumption of diesel arguing there is no proof that reduction had anything to do with adulteration.
He said there is a high possibility the reduction in consumption had everything to do with the high cost of diesel as a result of the levy.