Record high fuel cost as new VAT plan stays

An attendant fuels a car at a petrol station along Koinange Street, Nairobi. [Elvis Ogina, Standard]

The government is pushing on with its largely unpopular plan to increase tax on fuel, despite huge resistance and warning that it could deal a major blow to an economy suffering multiple shocks.

If the value-added tax (VAT) on petroleum products is increased to 16 per cent from current 8 per cent, industry players said, will result in an increase of over Sh12 per litre of diesel and super petrol. It could see super petrol hovering at around Sh200 a litre.