Kenya's government plans to use a Sh17 billion subsidy to protect citizens from fuel price increases over the next 60 days if Middle East conflicts extend beyond May and June. Finance Minister John Mbadi disclosed these plans to MPs, including potential VAT adjustments.
The Kenyan government intends to allocate a Sh17 billion subsidy to counter rising fuel product prices should Middle East conflicts persist. Finance Minister John Mbadi outlined these plans to MPs yesterday, stating the administration would review product taxes if the subsidy proves insufficient.
Oil marketing companies have announced that prices could rise by at least Sh20 due to costs from two tankers operating outside the government contract. Adjusting the 10% VAT on fuel is expected to help during the April 15 to May 14 period.
“In the new price schedule, however, product prices, insurance, war risk and fees are expected to increase due to the war. We will adjust VAT so that prices do not become excessively expensive,” Mbadi told lawmakers.
The subsidy combined with tax tweaks represents the government's main strategies to protect fuel consumers in the coming months.
