It's time to review painful taxes on fuel

Petroleum drives Kenya's economy and high prices raise production and living costs. 

The country imports all its petroleum products as its oil discoveries are yet to hit full commercial levels. This, however, is no reason to price petrol, diesel and kerosene at the current exorbitant rates.

Data from the Energy and Petroleum Regulatory Authority shows the landed cost for Super Petrol, diesel and kerosene is far below the pump price.

The landed cost of Super Petrol for November is Sh48.13 but the average retail price is Sh110.59, a difference of Sh62.46.

Reason? Exorbitant pipeline transport costs, high pipeline and depot losses and overpriced storage and distribution costs.

Add Excise Duty, Road Maintenance Levy, Petroleum Development Levy, Petroleum Regulatory Levy, Railway Development Levy, Merchant Shipping Levy, Import Declaration Fee and Value Added to all petrol and diesel imports. Kerosene attracts all these plus an  Anti-adulteration levy. 

Taxes and levies on Super Petrol at the current price is Sh47.18 per litre.

Taxation is necessary to generate revenue but over taxation, as in the case of petroleum products, becomes counterproductive.

Attaining the Big Four Agenda of affordable housing, food security, universal health care and manufacturing will remain but a pipe dream under such a harsh tax regime.