NAIROBI, July 14 – The Kenyan government has extended its reduced Value Added Tax (VAT) on petroleum products for an additional three months, as authorities seek to shield households and businesses from continued volatility in global energy markets.
The extension means the VAT rate on petroleum products will remain at 8% until mid-October, instead of reverting to the standard 16%. Kenya first introduced the temporary tax reduction in April after global crude oil prices surged during heightened tensions between the United States and Iran.
Announcing the decision, Energy and Petroleum Cabinet Secretary Opiyo Wandayi said the government would also provide a 945 million Kenyan shilling ($7.31 million) fuel subsidy to maintain current pump prices during the July to August fuel pricing cycle.
According to Wandayi, the measures are intended to cushion consumers from fluctuations in international oil prices while supporting economic stability.
He also sought to reassure the public over fuel availability, stating that supplies remain adequate despite renewed geopolitical tensions involving the United States and Iran.
Kenya imports nearly all of its refined petroleum products from the Middle East under government-to-government supply agreements, leaving the country exposed to disruptions in global energy markets and international shipping routes.
The latest intervention follows growing concerns over the impact of higher fuel costs on the economy. In May, transport operators staged protests over rising fuel prices, highlighting the pressure that elevated energy costs have placed on businesses and consumers.
By extending the tax relief and introducing an additional subsidy, the government aims to ease inflationary pressures, support economic activity and provide greater price stability as uncertainty persists in global oil markets.
