Petroleum Principal Secretary (PS) Andrew Kamau says the ministry had to introduce high levies on kerosene to make it expensive because crooked traders were buying it at a low cost and mixing it with diesel and thereafter selling the adulterated fuel to unsuspecting motorists.
Appearing before the National Assembly’s Committee on Finance and National Planning on Wednesday, September 29, the PS said some of the impure fuel found its way to Uganda, prompting the neighbouring country to shun fuel from Kenya.
Kamau said several motorists had filed complaints that their engines broke down after filling their tanks with adulterated diesel.
“We used to import so much kerosene back in the day. We, however, discovered that some [unscrupulous] traders were mixing the kerosene with diesel, and selling the mixture to motorists,” said the PS.
“A mass outcry by motorists over damaged engines followed. The dishonest traders made a killing at the expense of consumers,” Kamau told the Gladys Wanga-led committee.
The PS said the ministry had to come up with measures to mitigate the illegal practice. According to him, introduction of the anti-adulteration fuel helped manage the situation as it pushed up the price of kerosene, making it less lucrative. The levy is charged at Sh18 per litre of kerosene.
“The then-Sh26 price difference between a litre of diesel and a litre of kerosene prompted some dishonest traders to buy the cheap kerosene and mix it with diesel, which they’d sell to motorists at a relatively high cost. That forced us to introduce more taxation and reduce monthly kerosene imports from 80 million litres to 15 million litres,” said the PS.
Kamau said by the time the measures were being put in place, Kenya had already lost the Ugandan market to Tanzania that had introduced the anti-adulteration taxes much earlier.
In Kenya, the total taxes paid on respective fuel are Sh58.81 for a litre of petrol, diesel (Sh46.46) and kerosene (Sh41.14). In Tanzania, petrol incurs a Sh43.21 tax per litre, diesel (Sh37.26) and Kerosene (Sh34.74), while in Uganda, the tax on a litre of petrol is Sh45.16, diesel (Sh35.19) and Kerosene (Sh9.34).