The price of super petrol in Kenya is set to drop by Ksh.10.49 if MPs adopt new proposals by the Finance and National Planning Committee.
The committee led by Gladys Wanga proposes a slash of value-added tax (VAT) by half on diesel, petrol and kerosene, which will see buyers charged four per cent on VAT from the current eight percent.
The committee also proposes that the petroleum development levy charged on the supply of petrol and diesel be reduced to Ksh2.90 from Ksh5.40 presently.
If the proposals are adopted, supplier margins (profits made by oil marketing companies (OMCs)) will be reduced by Ksh3 per litre.
If the changes are adopted and implemented, a litre of petrol in Nairobi will drop from the current price of Ksh134.72 to Ksh124.23, while diesel will drop from Ksh115.60 to Ksh105.82. The price for a litre of kerosene will drop from Ksh110.82 to Ksh103.71.
The relief on diesel and kerosene users is tabulated at about Ksh.9.78 and Ksh.7.09 respectively.
For the liquefied petroleum gas (LPG) popularly known as cooking gas, the committee proposes that the VAT should be slashed by half from the current 16 percent to eight percent. This will see the price of the commodity drop by at least Ksh166 for refiling a 13kg cylinder.
If the proposals are adopted in full, inflation adjustment on excise duty charged on petroleum products will be suspended in the current 2021-2022 fiscal year.