Sakaja proposes fuel tax cap to keep pump prices below Sh200

Nairobi Governor Johnson Sakaja./HANDOUT

Nairobi Governor Sakaja Johnson has proposed a new approach to fuel pricing, suggesting a tax-capping mechanism that would suspend fuel taxes whenever pump prices exceed Sh200 in a bid to protect consumers from rising costs.

Speaking on Wednesday, amid growing public anger over the rising cost of fuel, Sakaja said the government should rethink its fuel-pricing model and introduce a flexible formula that cushions consumers when global oil prices surge.

“If we sit down and think critically, we can find a solution,” Sakaja said.

The governor suggested that fuel taxes should only apply when pump prices remain at or below Sh200 per litre. Under the proposal, taxes would be suspended automatically once prices exceed that threshold.

“We can introduce price capping where taxes on fuel only apply when pump prices are KSh200 and below. If prices rise above that level, the taxes would be suspended,” he said.

Sakaja argued that the government’s role should be to ensure taxes do not push fuel prices beyond levels that ordinary Kenyans can afford.

“Our role as government is to create a formula ensuring that the landing cost of fuel, together with taxes, does not push pump prices beyond Sh200,” he stated.

The proposal comes at a time when fuel prices remain a major concern for households and businesses, with many Kenyans blaming high pump costs for rising transport fares, food prices and the overall cost of living.

Sakaja said the model would still allow the government to collect taxes whenever global fuel prices are stable and import costs remain low.

However, he insisted that taxation should be relaxed when international fuel prices spike sharply.

“If higher landing costs combined with taxes would push fuel prices above Sh200, the taxes should be suspended to cushion wananchi. That is my suggestion on the fuel issue,” Sakaja added.

The remarks are likely to fuel debate over how the government balances revenue collection with growing public pressure to lower the cost of living.