Government Spokesperson Dr. Isaac Mwaura expects that the slash in Value Added Tax (VAT) on fuel from 16 per cent to 8 per cent will result in a decrease of pump prices by as much as KSh8 to KSh10 per litre.
Making his remarks at Harambee House Annex on Thursday, Mwaura stated that the government is willing to lose some of its revenue in order to provide a cushion to Kenyans against the increasing global fuel prices.
According to Mwaura, this is only one of the many measures that the government is considering to bring about economic stability against external shocks.
He said that a stabilization fund of KSh6. 2 billion has been made available through Petroleum Development Levy for the purpose of offsetting a part of the rising costs.
Besides subsidies, the government also plans to step up to the plate with their fuel subsidy program in order to keep prices at moderate levels and thereby protect consumers.
The spokesperson informed that the government is not only extending fuel subsidies but also highly involved in negotiations with the various stakeholders as they both try to find means of controlling fuel prices – this is important as the Middle East conflict has a strong impact on the oil markets globally.
Even though fuel levies still exist, Mwaura stood firm that they continue to be very necessary for the financing of infrastructure projects, for instance roads, which ultimately reduce the cost of transport.
The official further remarked the government-to-government fuel importation scheme has been effective in ensuring a dependable supply.
