Why the ERC Wants Kenyans to Pay More for Kerosene

The Energy Regulatory Commission has been pushing the National Treasury to increase taxes on Kerosene but the National Treasury has yet to cave in to the pressure. If effected, it would see the common man paying more both for basic commodities as well as for kerosene, something that would greatly affect low income earners who are the majority in the country.

Energy Regulatory Commission believes that by increasing the taxes on kerosene will compel most Kenyans to abandon the use of cheap but dirty fuel and turn to the use of gas. At the moment, according to the statistics, more than 50 percent of Kenyans entirely rely on kerosene for lighting as well as for cooking because the fuel is cheap as compared to other forms of energy. This implies that more than 50 percent of Kenyans cannot afford the use of electricity of cooking gas.

The regulator also believes that if kerosene is heavily taxed, unscrupulous fuel sellers who engage in the mixing of kerosene with diesel as a way of taking advantage of low prices of the product to earn a lot from the unsuspecting motorists. The government enacted the Excise Duty Act from December 1^st 2015 that increased the tax on diesel by 2.06 shillings per liter to 10.30 shillings per liter. From this, therefore, if ERC had managed to convince the treasury to increase the tax on kerosene, low-income Kenyans would now be paying 10.30 shillings more per liter on kerosene.

Kerosene currently does not attract any excise duty. 0.45 shillings is levied per liter and this comprises of the petroleum regulation levy as well as petroleum development levy. In 2011, Mwai Kibaki’s government did away with the excise duty on kerosene as a way of cushioning Kenyans against the high cost of living.