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Petrol, Electricity Prices Set To Hit The Roof In New Taxation Formula

BY Getrude Mathayo · October 28, 2020 12:10 pm

Kenyans will have to dig deeper into their pockets to pay for petroleum and electricity bills if parliament approves a new taxation formula aimed at boosting the finances of the Energy Petroleum Regulation Authority (EPRA)

According to the formula report proposed by the Energy ministry, will see the regulatory levy on petroleum charged at up to one percent of the combination of the landing, transport, and storage costs of fuels instead of the current fixed charge.

The ministry is also recommending a new levy of up to one percent on the consumption charge for electrifying under the proposals already endorsed by the Energy committee of the National Assembly.

EPRA levies will now fluctuate from time to time depending on the landed cost of petroleum products and changes in the energy for electricity consume if the proposals are passed by Parliament.

The petroleum regulatory levy is presently set at 0.25 shillings for every liter of petrol, diesel, and kerosene and 0.30 shillings per kilowatt-hour based on EPRA’s latest pricing for this month.

Joseph Njoroge, Energy Principal Secretary said that the proposed formula would boost collections by EPRA to fund its operations.

He said the levies now be applied as a percentage and not as fixed rates as was previously. The one percent is the limit so it can be anything below that and if it was to be increased to the set limit then there has to be a good reason to do so.

He added that it is a percentage of energy charge for electricity and a percentage of the cost of fuel without the tax elements. Njoroge said they made the proposals because EPRA is expected to play bigger roles in regulating the upstream and midstream oil sectors hence their budget will change going forward.

Petrol prices would have risen by up to 0.17 shillings from set 107.27 shillings while diesel prices would have risen by at least 0.14 shillings from 92.91 shillings going by the October prices released by EPRA.

Additionally, households would have paid up to 0.11 shillings more for kerosene-based on the 83.73 shillings pricing announced by the regulator.

Under the proposed formula, households that consume more than 10kWh of electricity would pay an additional 0.12 shillings per kilowatt-hour on the current 23.36 shillings.

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