Treasury in last-ditch attempt to lobby parliament

National Treasury CS Henry Rotich (L) when he appeared before the National Assembly Finance Committee at Parliament. [Boniface Okendo/Standard]

The National Treasury was yesterday engaged in a last-minute attempt to get lawmakers to accept the proposals made by the President when he declined to sign the Finance Bill last week.

The MPs have protested that some of the proposals would crush Kenyans, who are already reeling from a high cost of living.

These include the retaining of value added tax (VAT) on fuel and the proposal to raise taxes on kerosene, which would push up retail prices to be at par with that of diesel.

Treasury Cabinet Secretary Henry Rotich (pictured) defended the recommendations by President Uhuru Kenyatta, noting the need to raise revenues to meet the country’s budget requirements.

Among the proposals that did not go down well with the members of the Parliamentary Committee on Finance are the increase in the price of kerosene, which will go up by close to Sh20. The Government said this was aimed at fighting adulteration.

Committee members noted that this would leave many users of the fuel in urban and rural areas without any alternatives.

“Adulteration is happening because the price of kerosene is lower than that of diesel. Because of this, our petroleum products are being rejected by other countries in the region who now prefer to import through Tanzania. To fix this, there should not be a disparity between the prices of kerosene and diesel. Tanzania did it and adulteration has substantially gone down,” Mr Rotich told the committee yesterday.

“The annual consumption of kerosene is 600 million litres and of this, over 70 per cent of it is used for adulteration and the genuine consumers use just about 30 per cent. It would appear that we import kerosene so that it can be used in adulteration,” said the CS.

He downplayed the impact the increase in the price of kerosene would have on consumers and instead claimed that it was the people who adulterate diesel that had been overplaying the impact on consumers in a bid to protect their illegal businesses.

Cooking gas

Rotich added that households were slowly taking up cooking gas as well as getting connected to the national electricity grid through the Last Mile programme.

A project that was supposed to distribute liquefied petroleum gas (LPG) cylinders to poor households at subsidised prices, and therefore offer a reprieve to consumers of kerosene, has stalled.

The planned hike in kerosene prices, which would see it retail at the same levels as diesel did not sit well with the MPs, who noted the hardships Kenyans would be exposed to, especially those who relied on the fuel for cooking and lighting.

“There are people who will buy Sh5 or Sh10 worth of kerosene so that they can cook supper. How will they afford cooking gas?” asked Rahim Dawood, the MP for North Imenti.