Fuel Prices Drop as VAT Cut Takes Effect

Nairobi, Kenya — Motorists across the country are set to enjoy some relief after the Energy and Petroleum Regulatory Authority (EPRA) announced a reduction in pump prices following a cut in fuel VAT.

In the latest review, the price of petrol has dropped by KSh 9.37 to retail at KSh 197.60 per litre, while diesel has decreased by KSh 10.21 to KSh 196.76 per litre. The price of kerosene, however, remains unchanged.

The adjustment comes after the National Treasury reduced Value Added Tax (VAT) on petroleum products from 13 percent to 8 percent, a move aimed at cushioning Kenyans from the high cost of living.

Energy costs have been a major driver of inflation in recent months, with rising fuel prices pushing up transport fares and the cost of basic commodities. The latest reduction is therefore expected to ease pressure on households and businesses that rely heavily on fuel.

Industry players have welcomed the move, noting that lower diesel prices in particular could help bring down the cost of goods and services, as it is widely used in transportation and manufacturing.

Despite the relief, concerns remain over global oil price volatility and exchange rate fluctuations, which continue to influence local fuel pricing. Analysts warn that while the VAT cut offers short-term relief, long-term stability will depend on broader economic factors.

EPRA stated that it will continue to monitor market conditions and adjust prices accordingly in line with its monthly fuel pricing cycle.