PETROL PRICE IS EXPECTED TO RISE FROM 1ST SEPT, 2018

#Tuko
The price of petrol is set to go up beginning Saturday, September 1, if the government goes ahead to impose a 16% Value Added Tax (VAT) on petroleum products.

The imposing of VAT is likely to be implemented unless Members of Parliament amend the law to do away with a 2013 clause, according to Energy Regulatory Commission boss Pavel Oimeke.

The price of Super Petrol is KSh 57 when it arrives at the port of Mombasa but increases to KSh 112 due to taxes, levies and profit margins imposed by importers.

If the tax will be added it would mean Kenyans would pay up to KSh 130 per litre from the current KSh 112 which was arrived at through the following additions;

A litre of Super Petrol on arriving at the port of Mombasa costs KSh 57.53.

After arrival the fuel is stored and then distributed which are taxed charges amounting to KSh 4.41 which brings the cost to KSh 61.9 per litre.

The importers of this fuel on average seek a profit margin of KSh 7 per litre which translates to KSh 68.9 which, if added KSh 3.89 taxed by dealers, translates to KSh 72.83.

Fuel prices are set to go up with Super Petrol likely to retail at KSh 125 if the proposed Value Added Tax is imposed beginning September, 2018.

This cost however skyrockets to KSh 112.2 per litre after heavy government taxes and levies of KSh 39.37 collected from every litre of Super Petrol purchased.

Out of the KSh 39.37, KSh 19.90 is taxed as excise duty, KSh 18 as road maintenance levy, 65 cents and KSh 82 cents respectively charged for petroleum development and regulation and development of railway network.

A review of these levies and taxes show that a litre of Super Petrol which costs about KSh 56 appreciates in value to get to the current KSh 112.20 per litre in Nairobi.

The anticipated VAT charge expected to take effect on Saturday, September 1, would further raise the price of a litre of Super Petrol by at least KSh 12.38 taking the price to over KSh 125 per litre.

This would translate to 53% government taxes and levies on Super Petrol and the anticipated VAT charge would push up the diesel prices from the current KSh 96 to KSh 114 which is a positive deviation of KSh 10.99 .