President William Ruto has assented to the Value Added Tax Amendment Bill to cushion consumers from further increases in fuel prices within the next three months.
The law which is effective April 15, 2026 has lowered the VAT on super petrol and diesel by half from 16pc to 8pc with a litre of super petrol declining by Ksh. 9.37 per litre and diesel by Ksh. 10.21 per lire.
The reduction in VAT rate on petroleum products follows a public outcry after the Energy and Petroleum Regulatory Authority (EPRA) hiked pump prices in their review on April 14 where a litre of super petrol was increased by Ksh 28.69 per liter and diesel Ksh 40.30 per litre while kerosene remained unchanged.
According to EPRA, the level of subsidy on kerosene has also been reduced from Ksh 108.10 per litre to 96.56 per litre.
Effective April 15, consumers in Nairobi will now pay a maximum of Ksh 197.60 for a litre of super petrol, Ksh 196.63 for a litre of diesel and Ksh 152.78 for a litre of kerosene until May 14.
However, the VAT Amendment Act which has reduced VAT on super petrol and diesel by 800 basis points will offer consumers temporary reprieve until July 14 as the government seeks to ease adverse effects on cost of goods and services due to the fuel price increase.
The increase in fuel prices was triggered by the ongoing conflict in the Middle East which has created a shock in the global supply chain of petroleum and petroleum products.
Kenya which relies heavily on imported fuel from the gulf under government-to-government by three oil state owned oil marketers from the region saw the cost of imported fuels rise significantly.
Average landed cost of super petrol went up by 41.53pc per cubic metre in March after the war broke out while that of diesel and kerosene went up by 68.72pc and 105.15pc respectively.
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