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9 different fuel-related taxes in Kenya

Gas prices may reach a record-breaking Sh300 per liter, according to Energy Cabinet Secretary Davis Chirchir.

Energy Chief Spokesman Davis Chirchir stated on November 6 before the National Dialogue Committee in the Bomas of Kenya that the violence might force worldwide crude prices to rise to $150 per barrel, translating to a price of Sh300 per litre at the pump.

He continued by saying that there is little the government can do to influence fuel prices abroad.

The Energy and Petroleum Regulatory Authority (EPRA), which is set to unveil new fuel pricing the following week, has issued this warning.

Petrol prices in Nairobi reached a record high of Sh217.36 per litre during the most recent review for the October-November cycle, with diesel retailing for Sh205.47 and kerosene at Sh205.06. EPRA also raised the costs of gasoline by Sh5.72 per litre, kerosene by Sh2.45, and diesel by Sh4.48.

According to the Energy CS, his ministry is making efforts to prevent Kenya from entering an economic crisis as a result of rising fuel costs.

Additionally, he said that they intend to bargain with power producers to relieve consumers of the purchase price burden in order to lower power expenses.

The primary factor influencing the retail price of gasoline is the cost of crude oil, which is subject to fluctuations both nationally and regionally.

Crude oil prices are influenced by a wide range of factors, such as supply and demand, political unrest or conflict in nations that produce the commodity, and output reductions by those nations.

Fuel retail prices are mostly determined by refining expenses and profits.

Higher-octane fuel carries a premium price from refiners, with premium-grade gasoline being the most costly.

The third biggest factor influencing the retail price of petroleum is the costs and revenues associated with distribution and marketing.

These expenses cover the price of running and maintaining gas stations as well as the cost of moving fuel from refineries to terminals and ultimately to gas stations.

The fourth-largest factor influencing the retail price of fuel is taxes. Nine different forms of taxes make up more than half of the fuel price in Kenya.

The 9 TAXES levied on fuel in Kenya consist of:
18% excise tax TVA
Levy for road upkeep
Levy for petroleum development
Fee for import declarations
Levy for petroleum regulations
levy for railway development
Levy against adulteration
Levy on merchant shipping

Conflict or political unrest in nations that produce oil may potentially drive up oil prices.

For instance, the continuous conflict between Israel and Hamas has been suggested as a possible reason behind Kenya’s rising gas prices.

How oil corporations handle their finances
Oil corporations frequently encourage their clients to cut back on investments in new production during unstable economic times. This lowers the price of oil by limiting supply, which boosts profit, and saves money for emergencies.

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