Pain at the pump as new fuel tax takes effect

Motorists will have to shoulder higher fuel costs in coming months, as the Energy Regulatory Commission (ERC) implements the Sh6 road maintenance levy increase on fuel prices.

Treasury Cabinet Secretary Henry Rotich raised the roads maintenance levy from Sh12 to Sh18 during the 2016/17 budget which will now see a liter of fuel cost more.

The price of diesel has shot up by the highest margin in the latest review, with the ERC announcing it will retail at Sh9.37 more for a liter. This will see a liter of diesel retail at Sh83.24 in Nairobi.

This marks the largest price increase in the cost of fuel, with prices dropping since late 2015.

A liter of super petrol will increase by Sh6.76 and will retail at Sh92.93 in Nairobi.

“In this month’s review, ERC has factored  Sh6 per liter in additional Road Maintenance Levy for both super petrol and diesel in line with the Road Maintenance Levy Fund (Imposition of Levy) (Amendment) Order, 2016,” the regulator said in a statement.

Pump prices have been on the rise over the last two months as super petrol rose by Sh1.92 in the last review while the cost of a liter diesel rose by Sh3.34 during the last review.

The increase in fuel prices comes at a time consumers are struggling with the rising cost of living. June inflation shot up to 5.8 percent from May’s percent on the back of higher food costs.

The review is expected to have an impact on retail prices of goods as producers pass on the extra transportation costs to the consumers.

During the budget, Mr Rotich also introduced a higher excise duty on kerosene of Sh7, 205 per 1000 liters in an effort of reducing the level of fuel adulteration.

The ERC factored in the duty in June raising kerosene prices by Sh7.20

In the latest review, the price for a liter of kerosene has gone up by Sh3.41 and will retail at Sh61.45.

The new prices take effect on July 15.