Energy Cabinet Secretary Davis Chirchir has raised the Energy and Petroleum Regulatory Authority (EPRA) Levy from 0.25% to 0.75%.
In a gazette notice dated February 14, 2023, Chirchir announced that the new levy rate would be effected from February 15 using the power conferred to him by the Energy Act.
“These Regulations may be cited as the Energy (Energy and Petroleum Regulatory Authority Petroleum Levy) Regulation, 2024 and shall come into operation on the 15th of February 2024,” the notice read in part.
The Levy, according to the notice, shall be paid on the petroleum products consumed in Kenya.
The 0.25% rate had been in place since 2016 when the then Petroleum Cabinet Secretary John Munyes adjusted it.
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Coming at a time when the prices of fuel products have remained beyond the Ksh190 mark, the increment in the EPRA levy could see Kenyans dig deeper into their pockets to pay for fuel products in the upcoming cycle.
EPRA, which is the body mandated to regulate prices of petroleum products in the country, computes the maximum price for petroleum products using various factors including the landing costs of the products and different levies and taxes.
Higher taxes or levies would add to the charges imposed on the fuel consumers and hence driving the overall prices up.
How new PRA levy will impact petrol prices
Currently, the EPRA includes the 16% Value Added Tax, the Road Maintenance Levy Fund (RMLF), the excise duty, Railway Development Levy, Merchant Shipping Levy, and the Petroleum Development Levy- among others.
The above levies and taxes are then added to charges including the distribution cost to derive the maximum price a petroleum retailer should sell a liter of each commodity.
Also Read: EPRA Reduces Fuel Prices for Second Month in a Row
According to the Energy Act, the levies are part of the sources of EPRA’s revenue besides revenue generated from issuing licenses to various vendors.
The Cabinet Secretary responsible for matters relating to petroleum may make Regulations to provide for a levy prescribing the rates of the levy, and when the levy should be imposed or not.
In its last review of petroleum prices for the February/ March cycle, the regulator capped the price of one liter of Super Petrol at Ksh206.36, while Diesel and Kerosene were set to retail at Ksh195.47 and 193.23 respectively in Nairobi.
After dropping for two months in a row, fuel prices could be on their way up again as prediction indicates that global oil prices are expected to rise due anticipated high demand in 2024. Other charges such as newly increased EPRA levy are also expected to drive the pump prices further up.
