'Ksh.5 billion subsidy not enough!' LSK calls for more gov't effort to lower fuel prices

In a statement issued on Friday, LSK President Charles Kanjama warned that the sharp increase in fuel prices, particularly the Ksh.46.29 rise in diesel announced by the Energy and Petroleum Regulatory Authority, will significantly worsen economic pressure on households, public transport operators, small businesses and the broader cost of living. 

“Diesel remains central to transport, food production and commercial activity, meaning the inflationary impact of this adjustment will be felt across the economy, especially by ordinary Kenyans already under strain,” said Kanjama.

While acknowledging the government’s Ksh.5 billion Petroleum Development Levy subsidy as a mitigating measure, the LSK argued that “greater intervention and transparency remain necessary.”

LSK also pointed to global instability and supply disruptions in the Persian Gulf as contributing factors to rising international energy costs, but emphasised that government action must remain anchored in constitutional principles, particularly Article 201, which calls for equitable, transparent and responsible public finance management.

“In the premise, the government should urgently consider additional measures to cushion vulnerable sectors, strengthen oversight against price exploitation and ensure that public policy and revenue generation remain anchored in equity, social protection and economic justice,” said Kanjama.

Former LSK President Faith Adhiambo echoed Kanjama’s sentiments, reiterating that the Ksh.5 billion cushion deployed from the Petroleum Development Levy Fund is not enough. 

“That cushion is clearly not enough. Of concern is that VAT on petroleum has now been pegged at 8% pursuant to Legal Notice No.70 of 15th April 2026, down from 16%. That reduction should have meaningfully softened these prices. Yet here we are. Two consecutive brutal cycles,” she said.

In the latest pump prices review, the Energy and Petroleum Regulatory Authority (EPRA) indicated that the cost of Super Petrol and Diesel has gone up by Ksh.16.65 and Ksh.46.29 per litre, respectively, while the price of Kerosene remains unchanged.

In Nairobi, Super Petrol, Diesel and Kerosene will thus retail at Ksh.214.25, Ksh.242.92 and Ksh.152.78 for the next 30 days.

"The prices are inclusive of the VAT, in line with the VAT Act, 2013 as read with  Legal Notice No.70 dated 15th April 2026, the Finance Act, 2023, the Tax Laws (Amendment) Act 2024 and the revised rates for excise duty adjusted for inflation as per Legal Notice No. 194 of 2020," said EPRA.

The Authority noted that the new prices were calculated based on the 8% VAT on petroleum, products pursuant to Legal Notice No.70 dated 15th April 2026.