The Ministry of Energy and Petroleum has disclosed fresh insights into the repercussions of the Finance Act, 2023, revealing a notable decline in Kenya’s consumption of petroleum products.
In a report unveiled on January 9, the Energy and Petroleum Regulatory Authority (EPRA) highlighted the significant downturn in the consumption of three key products: Kerosene, Super Petrol, and Diesel.
Amidst the economic challenges faced by Kenyans, many opted to leave their cars at home, resulting in a 2.83% and 2.29% decline in the consumption of Super Petrol and Diesel, respectively.
Kenyans instead opted to use matatus and public service vehicles trying to cope with the pinch.
The new taxes hitting mwananchi took a toll on these fuel products, with a double-digit decline reported in July 2023 compared to the previous month. Super Petrol witnessed a 10.29% decline, while Diesel recorded a substantial 13.04% decrease.
Although a recovery was observed in August, both products experienced another drop in September, with reduction rates at 1.34% for Super Petrol and 2.14% for Diesel.
Meanwhile, Kerosene faced the most severe blow, witnessing a staggering 47.6% decline, marking it as the worst-hit petroleum product.
On an overall scale, the three products collectively declined by 3.58% in the first quarter of the Financial Year 2023/24.
These developments followed the enactment of the Finance Act on June 26, 2023, by President William Ruto. Initially proposing a 16% tax on petroleum products, the legislation was later amended in response to widespread complaints from Kenyans. This resulted in scaling down the tax up to the current tax rate of 8%.
