Following another record increase in fuel prices this month, petrol prices shot up by Sh12. This is the highest in a period of 10 years. The increased fuel prices are as a result of nine taxes that it goes through before it reaches the consumer.
For the next 30 days petrol will retail at a Sh134, diesel at Sh115 and kerosene at Sh110.
When the product arrives in the country, petrol sells at Sh60, diesel at Sh58 and kerosene at Sh64. It is from here that the costs begin to add up the distribution and storage costs including the pipeline cost from Mombasa to Nairobi at 2 Shillings, other components such as pipeline losses accounting for about 0.01 Shillings and depo losses ranging from 26 Cents to 55 cents depending on the different products.
There are about nine taxes in total that are charged on petroleum products. These are;
1. Exercise duty
2. Road maintenance levy,
3. Petroleum development levy,
4. Petroleum regulatory levy
5. Railway development levy
6. Ati-adulteration levy
7. The merchant shipping levy
8. Import declaration fee
9. Value added tax which was previously suspended and later reintroduced in September, 2018.
These taxes are almost equal to the cost of the product itself, or what is called the landed cost. Those taxes were introduced by Members of Parliament and they account for close to half of the cost of the final pump price.
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