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Fuel prices shoot up starting Thursday as new Railway Development Levy tax measures begin to bite

By By MACHARIA KAMAU | August 15th 2013


Fuel prices will go up beginning this morning on the back of the recently introduced 1.5 per cent Railway Development Levy that has been factored in this month’s fuel prices by the Energy Regulatory Commission.

An increase in the price of crude and refined petroleum products as well as poor performance of the local currency also played part in rise in retail prices of petroleum products.

In the monthly retail price capping issued yesterday by ERC, kerosene goes up by a significant Sh4 per litre in Nairobi, dealing a blow to low income households in urban areas as well as rural households that use the fuel for lighting and cooking.

Super petrol will go up by Sh2.74 while diesel will increase by Sh1.58 in Nairobi. Kerosene will thus retail at Sh83.93 in Nairobi over the next one month, compared to Sh79.46 in the month of July.

Super petrol will sell at Sh112.26 from Sh108.18 while diesel will retail at Sh104.44 up from Sh101.06.

 “Imported petroleum products and ones delivered form the Kenya Petroleum Refineries Ltd in the month of July attracted a 1.5 per cent Railway development Levy, which has consequently been factored into the pump price computation,” said Kaburu Mwirichia, director general ERC in a statement yesterday.

“Taking into account the weighted average costs of imported products and products refined locally, the overall result for Nairobi is that the maximum allowed price of kerosene increases by Sh4.44 per litre, that of super increases by Sh2.74 per litre and diesel increases by Sh1.58 per litre.”

The Railway Development Levy introduced by Treasury in this year’s budget is expected to also see an increase in the price of other imported goods.

The money collected through the levy will be invested in the development of a new standard gauge railway line between Mombasa and Malaba.

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