Kenya’s Parliament has announced a new fuel tax measure that could affect motorists, businesses, and households across Kenya in the coming months.
The National Assembly passed the Tax Laws (Amendment) Bill, 2026, seeking to maintain Value Added Tax (VAT) on petroleum products at 8%, down from the standard rate of 16%.
Sponsored by National Assembly Majority Leader Kimani Ichung’wah, the bill proposes extending the reduced rate for another 90 days, with a possible additional three-month extension if the conflict in the Middle East persists.
How the Fuel Tax Relief Could Last Six Months
Moving the Bill in the National Assembly on Wednesday, October 14, Ichung’wah said the proposed extension would sustain the reduced VAT rate for another 90 days, with the Cabinet Secretary for the National Treasury allowed to extend it for a further three months if the conflict persists.
“We need to amend the VAT Act to extend the reduced rate for another 90 days, in the hope that the war in the Middle East will come to an end. If it does not, we are also allowing the Cabinet Secretary the latitude to extend the period for a further three months. This guarantees Kenyans continued access to the lower VAT rate of eight per cent on fuel for up to six months,” he said.
Also Read: EPRA Announces New Fuel Prices for October-November Cycle
Finance and National Planning Committee Chairperson Kimani Kuria supported the extension, saying global oil price pressures could affect transport fares, production costs and the general cost of living.
“Geopolitical tensions in the Middle East, which continue to exert pressure on global oil prices, led the Committee to deem it necessary to cushion Kenyans against rising fuel costs and their cascading effects on transportation, production costs and the general cost of living,” said Hon. Kuria.
Kuria noted that the Government had forgone approximately KSh54 billion in revenue over the preceding six months through the fuel tax relief measures.
Parliament Proposes Changes to Ceramic Tile Taxes
The Bill also seeks to amend the Excise Duty Act by changing the basis for calculating excise duty on ceramic tiles from weight to surface area, measured in square metres.
Ichung’wah said the current system, which imposes duty of either 5% of the excisable value or KSh50 per kilogramme, could place a heavy tax burden on importers because ceramic tiles are heavy.
Also Read: Gachagua Hints at Fuel Price Increase Ahead of EPRA Review
Under the proposed changes, duty on a typical consignment that currently attracts between KSh1.2 million and KSh1.5 million could fall to approximately KSh420,000 to KSh600,000. The amendment also covers other ceramic products and bathroom ware.
Mwea MP Mary Maingi backed the fuel tax relief, saying rising fuel prices reduce household spending by raising transport fares and food prices.
“I support this tax amendment because it touches on the kitchen table of every household. When fuel goes up, matatu fares go up, the price of food goes up, everything goes up,” she said.
Suba South MP Caroli Omondi also called for measures to reduce petroleum importation costs by eliminating unnecessary intermediaries.
Kenyans Face Fresh Fuel Price Hikes as EPRA Announces New Pump Rates
The Energy and Petroleum Regulatory Authority (EPRA) increased petrol, diesel and kerosene prices for the October 15 to November 14, 2026 pricing cycle, with all three products recording higher pump prices across the country.
In Nairobi, super petrol rose by KSh12.93 to KSh226.96 per litre, while diesel rose by KSh9.90 to KSh227.76 per litre. Kerosene recorded the largest increase, rising by KSh28.49 to KSh219.87 per litre.
The new prices took effect at midnight on October 15 and will remain in force until November 14, 2026, when EPRA is expected to conduct its next monthly review.
In Mombasa, super petrol retails at KSh223.81 per litre, diesel at KSh224.61 and kerosene at KSh216.71. Nakuru’s prices stand at KSh225.73 for petrol, KSh226.93 for diesel and KSh219.06 for kerosene.
In Eldoret and Kisumu, super petrol costs KSh226.51 per litre, diesel KSh227.71 and kerosene KSh219.83, reflecting regional differences in maximum retail prices.
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