The cost of petroleum products is set to go up by nearly Sh2 per litre from next week as consumers grapple with a general rise in cost of goods brought by the Railway Development Levy. The government on July 1 started collecting the 1.5 per cent duty on all imports, including fuel, motor vehicles, medicine, second-hand clothing and edible oils in a move that is set to erode consumers’ purchasing power. “Kenya Revenue Authority is collecting the 1.5 per cent duty on fuel discharges from July 1. It is a new cost that will be reflected in fuel prices going forward,” said Martin Kimani, the supply manager at KenolKobil. The blanket tax has roped in raw materials that were previously imported by manufacturers at zero duty, with the industrialists expected to pass on part of the additional costs to consumers. Motorists, households, manufacturers, and power producers will see the cost of kerosene, diesel, and petrol rise by between Sh1.2 and Sh1.8 per litre from Monday, going by current pump prices as the new levy is factored into the next petroleum price review. Mr Kimani said oil marketers would ask the Energy Regulatory Commission (ERC) to include the additional charge in the price review set to be announced on Sunday. ERC director-general Kaburu Mwirichia was non-committal on how the energy sector regulator would treat the new charge in the upcoming and subsequent price reviews. Two ships have discharged petroleum products at the port of Mombasa since the new levy came into force. Super petrol will record the highest price increment based on the commodity’s relatively high value compared to diesel and kerosene. In Nairobi, the price of super petrol, diesel, and kerosene is likely to rise by Sh1.6, Sh1.4 and Sh1.2 per litre before other factors like crude oil prices, foreign exchange rate and logistics are taken into consideration. Residents of remote areas — where transport costs inflate pump prices — will bear the heaviest burden from the new levy.
Posted on: Fri, 12 Jul 2013 05:48:20 +0000
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