Oct 23, 2021

Mawazo Writing Africa

Writing about the main

Tanzania cuts fuel pump prices while Kenya falters

Kenyans face another fuel price shock this week as MPs push forward legislative changes to protect consumers from price hikes amid excessive government taxes and rising crude oil prices in the international market, which hit a three-year high from $ 83 a barrel last week.

This is due to regional counterparts like Tanzania cutting and abolishing certain fuel taxes and revising the methodology of taxing bulk fuel imports to reduce the price of petroleum and petroleum products to lower the cost of living and put the country on a strong path for industrial growth and investment.

The Kenyan Energy and Petroleum Regulatory Agency will announce new fuel prices for Kenya on October 14th the period from October 15th known until November 14th with the fear that prices could stay at the increased level or rise.

On September 14th the price of the raw material rose to an all-time high, with The problem was exacerbated by the removal of a subsidy by the government to protect consumers from high fuel prices.

The government has increased the monthly subsidy of 7.1 Ksh (0.06 Abolished and pushed fuel prices to all-time highs.

Last week, the parliamentary committee on finance and planning, tasked with reviewing the necessary laws to reduce fuel costs within 14 days, asked for an additional seven days to work It was also necessary to investigate fuel ship mooring costs in the port of Mombasa in order to break up cartels of merchants who exploit consumers.

The committee has recommended a reduction in VAT (VA T) on fuel from eight percent to four percent and lowering the oil production tax to 2.90 Ksh (0.02) Ksh from 5.40 Ksh (0.04 US dollars) per liter of fuel. $ 0.08 of Ksh12 ($ 0.10) per liter of fuel and that the inflation adjustment of excise taxes levied on fuel imports for that year will be suspended. She also wants this fuel tax inflation adjustment to be made every two years.

Almost two weeks ago, the Kenyan Supreme Court suspended the introduction of the annual inflation adjustment tax of 4.97%. which would have led to a further increase in fuel prices with effect from October 1st.

Adverse effects

The Senate said the increase had happened on . impacted the economy, increasing the cost of living and increasing the cost of doing business for already overwhelmed citizens grappling with the effects of Covid-19. “This increase has outraged Kenyans, who are bearing the brunt of the effects of the increase such as higher transportation costs, higher food prices, high electricity costs and other adverse effects on most economic sectors,” read the Senate Order Paper for September 23, 2021. < / p>

The rate of inflation rose from 6.55% in July to 6.57% in August, driven by a sharp rise in food and gas prices for cooking, according to the Kenya National Bureau of Statistics. “We talked about the difficulty of increasing the cost of business, and what this big hike in fuel prices will do is that it will now create a situation where everything else will go up,” said Mike Macharia, chairman of the Kenya Association of Hotel Owners and Caterers.

In Tanzania the government checked the tax on the use of the port infra a structure (quay) at a rate of $ 10 per ton plus sales tax. The tax is now levied in Tanzania shillings and has been reduced from Tsh22 without VAT to 15 Tsh.

“Part of this was for the construction of the marine oil collection buoy and thus the proposed amount of Tsh15 ( $ 0.01) per liter can be used for maintenance, “said Godfrey Chibulunje, Acting Director General of the Energy and Water Regulatory Authority the 4.8 Tsh (0.002 USD) per liter is eliminated.

The country receives every seven shiploads of fuel per month. The same goes for the 1 Tsh fee charged by the Weights and Measures Agency (US $ 0.0004) per liter to Tsh 7 million (US $ 3,028.10) per shipload The government has also abolished the service charge on oil company operated mas fuel storage is charged. The fuel purity check fee has been reduced from 14 Tsh ($ 0.006) per liter to 7 Tsh ($ 0.003).

Additional coverage from Dorothy Ndalu