Fuel levy collections drop by nearly Sh1bn on higher taxes

Collections from the Petroleum Development Levy (PDL) dipped by nearly Sh1 billion in the year ended June, pointing to the depressed consumption of super petrol and diesel.

Official data from the Ministry of Energy and Petroleum shows that Kenya Revenue Authority (KRA) collected Sh25.2 billion from the levy in the year ended June, a Sh904.5 million drop from Sh26.1 billion raised the previous year.

The drop points to a fall in consumption of super petrol and diesel in the wake of costly fuel, with a litre of super petrol increasing by Sh2 to Sh179.30 from March while that of diesel rose by Sh8 to Sh168.40 in the monthly cycle that started on May 14.

Collections into the PDL kitty are used to stabilise pump prices and cushion consumers. However, a drop in the collections prompted additional funding from the Exchequer to meet the rising compensation demands.

“The previous stabilisation needs were far beyond the level of funds that required support from the Treasury,” said Energy and Petroleum Regulatory Authority director-general Danie Kiptoo recently.

The State through the KRA collects the levy at the rate of Sh5.40 for every litre of super petrol and diesel. It also collects Sh0.50 per kilogramme of liquified petroleum gas (cooking gas).

The State had in May fully scrapped the stabilisation scheme in a bid to ease pressure on the Exchequer amid cash flow hitches.

The Uhuru Kenyatta administration rolled out the scheme in April 2021, at the start of a spike in global prices of refined fuel.

However, in the current monthly cycle and the one that ended on September 14, the State tapped the kitty to cushion consumers from rising fuel prices.

Collections into the kitty are poised to dip in the current financial year in the wake of record-high prices announced on Saturday.

A litre of super petrol jumped to a fresh high of Sh217.36 in the monthly cycle, a Sh5.72 rise while that of diesel increased by Sh4.48 to Sh205.47 in Nairobi. A litre of kerosene increased by Sh2.45 to Sh205.06.

The record high prices for the month ending November 14 came even as the State partially tapped the kitty to cushion consumers against higher prices.

The Epra said without the stabilisation scheme, a litre of super petrol would be going for Sh220.43 while that of diesel would retail at Sh217.11 and Sh214.66 for that of kerosene.

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