KRA Collects Ksh 62 for Every Litre of Petrol

The Kenya Revenue Authority (KRA) is collecting Ksh62.89 on every litre of petrol making it a key beneficiary in the recent surge of fuel prices. The new tax price is a 39% jump from collections of the past two years; Ksh45.1 in June 2020 and Ksh 51.6 in 2021.

Taxes from fuel are estimated at Ksh 22.9 billion in June or 15.7% of average Kenya’s overall monthly duties of Ksh 145 billion. This is more than 3 times the Ksh 7 billion monthly subsidy that the State had offered to cushion consumers from the increase in oil prices.

However, the subsidy scheme proved unsustainable and according to Treasury CS Ukur Yatani, the state has started cutting back on the support. Without the subsidy, diesel prices would have increased by a further Ksh 48.19 a litre from the current Ksh140.

“A gradual adjustment in domestic fuel prices will be necessary to progressively eliminate the need for the fuel subsidy, possibly within the next Financial Year,” said CS Yatani on Wednesday, just a day after the new fuel prices were announced on June 14.

About 40% of the retail price of petrol is consumed by duties such as excise, VAT, import declarations fee, road maintenance, petroleum development, petroleum regulatory, railway development, anti-adulteration and merchant shipping levies.

Fuel prices are yet to increase following the Treasury’s decision to scrap the fuel subsidy scheme.