Govt Extends 8% VAT Cut On Fuel To October, Keeps Sh945 Million Subsidy
News Updated: 14 July 2026 17:23 EAT
Photo Courtesy: Energy and petroleum Cabinet Secretary Opiyo Wandayi
The government has extended the reduced 8 per cent Value Added Tax (VAT) on petroleum products for another three months, allowing motorists and businesses to continue benefiting from lower fuel taxation until October 14, 2026.
Energy and Petroleum Cabinet Secretary Opiyo Wandayi announced the extension, saying the measure was part of government efforts to cushion Kenyans from rising fuel costs and global oil market uncertainties.
The 8 per cent VAT rate, which replaced the previous 16 per cent charge on petroleum products, has been maintained as a relief measure aimed at reducing the cost burden on consumers and industries that rely on fuel.
The government has also retained a Sh945 million fuel subsidy under the Petroleum Development Levy (PDL) to support price stability during the July-August 2026 fuel pricing cycle.
The subsidy mechanism is used to moderate the impact of changes in international crude oil prices, shipping costs and foreign exchange fluctuations that affect the cost of imported petroleum products.
Kenya imports most of its petroleum products, making local fuel prices sensitive to global market trends and movements in the exchange rate. Any increase in import costs can affect transport, manufacturing and household expenses.
The extension of the VAT relief comes as the Energy and Petroleum Regulatory Authority (EPRA) continues with its monthly review of fuel prices, which determines the maximum retail prices for petrol, diesel and kerosene.
The government has previously introduced tax adjustments and fuel stabilisation measures to manage price increases and reduce the impact of high energy costs on the economy.
The Energy Ministry said the measures are intended to provide temporary relief to consumers while the government monitors developments in the global petroleum market.
The VAT reduction and the Sh945 million subsidy will remain in force as the government evaluates future interventions to maintain fuel affordability and economic stability.
Tags: Ministry of Energy And Petroleum Opiyo Wandayi Opiyowandayi Petrol Signs Signs Media Signs Media Kenya Limited Signs Tv Signsmedia Signst Signstv Signstvkenya Signsv
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FELIX MAKONA
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