Nairobi Governor Johnson Sakaja has proposed a new fuel pricing model that would suspend fuel taxes whenever pump prices rise above KSh200 per litre, as concerns grow over the rising cost of living in Kenya.
Speaking during an interview on Hot96, Sakaja said the government should introduce a flexible tax mechanism that protects consumers during periods of high global fuel prices while still allowing revenue collection when costs are lower.
Under the proposal, taxes on fuel would only apply when pump prices remain at or below KSh200 per litre. If international oil prices or landing costs push fuel prices beyond that mark, the taxes would automatically be paused to cushion consumers.
“We can introduce a price-capping formula where taxes are only charged when fuel prices are below KSh200. If prices exceed that level, the taxes should be suspended,” Sakaja said.
Why Sakaja Wants Fuel Taxes Reviewed
The governor argued that the government has a responsibility to ensure taxes do not make fuel unaffordable for ordinary Kenyans.
According to Sakaja, the Energy Ministry should develop a pricing formula that balances taxation and consumer protection, especially during periods of global market instability.
“Our role as government is to create a system where fuel landing costs and taxes combined do not push pump prices beyond KSh200,” he stated.
He explained that when global fuel prices are low, taxes can continue being charged without heavily affecting consumers. However, during sharp increases in international oil prices, temporary tax relief would help ease pressure on households and businesses.
What the Proposal Could Mean for Kenyans
Fuel prices directly affect transport fares, food costs, electricity production, and the prices of basic commodities across the country.
If implemented, Sakaja’s proposal could:
- Reduce pressure on public transport fares
- Help stabilize food and commodity prices
- Lower operating costs for businesses
- Cushion households from sudden fuel price spikes
However, suspending fuel taxes could also reduce government revenue collected through petroleum levies and VAT, potentially affecting funding for development projects and public services.
Rising Pressure Over Cost of Living
The proposal comes at a time when Kenyans continue to express frustration over the high cost of living, with fuel prices remaining one of the biggest economic concerns.
Consumers and businesses have repeatedly called on the government to review fuel taxation policies, arguing that rising pump prices continue to increase the cost of transport, production, and everyday essentials.
Sakaja’s remarks are expected to fuel further debate over Kenya’s fuel pricing structure and the government’s broader tax policies under the current economic climate.
