President Uhuru Kenyatta signed Finance Bill, 2022 into law, allowing the Value Added Tax (VAT) on liquefied natural gas lowered from 16 to eight percent.
This is a reprieve for Kenyan households who have been hit hard by the high cost of living aid rising inflation rates.
On June 13, 2022, the National Assembly ratified several changes in the Finance Bill 2022 just before they went on an indefinite recess pending the August 9, 2022 General Election.
Gladys Wanga Chair of the Finance and National Planning Committee, amended the Bill to bring down VAT on gas.
LPG dealers and suppliers in Kenya increased the commodity prices in March this year due to the shortage of global supply of the commodity as Russia continues her offense against Ukraine.
In Nairobi, Kenyans are now paying Ksh.1,560 to refill a 6kg gas cylinder from the lows of Ksh.1,441. The 13kg is going for Ksh.3,340 from Ksh.3,113. The 35kg gas refill dealer price is Ksh.8,192.
Gas prices have been on an upward trajectory since early 2016 when the price of a 13kg cylinder shot to Ksh.2,000.
By October 2020, the price for refilling a 13kg cylinder went to Ksh.2,445 and in November 2021 it went to Ksh.2,513.
The price increase was initially caused by a reintroduction of a 16 percent VAT on LPG, which was scrapped in 2016.
Kenyan households will have to wait until VAT reflects on the acquisition price of the merchandise by gas dealers and suppliers.
The president also signed second Supplementary Appropriation Bill of 2022 to make available a total of Ksh.88,822,649,842 for Government expenditure on public services.
Out of this, Ksh.49,292,440,866 will be channeled to the fuel stabilization fund kitty.
The monies will be paid to Oil Marketing Companies (OMC) to continue shielding Kenyans from fuel price hikes.
