Kenya has extended a reduction in Value Added Tax (VAT) on petroleum products for an additional three months, keeping the tax rate at 8% until mid-October to shield consumers and businesses from volatile global energy prices.
Energy and Petroleum Minister Opiyo Wandayi announced the decision on Tuesday, saying the extension follows the government’s April move to halve VAT from 16% after crude oil prices surged during the U.S.-Israeli conflict with Iran.
The government will also provide a fuel subsidy of 945 million Kenyan shillings ($7.31 million) to maintain current pump prices during the July–August fuel pricing cycle, helping to limit the impact of rising import costs.
Kenya imports almost all of its petroleum products from the Middle East through government-to-government supply agreements, leaving the country vulnerable to disruptions and price spikes linked to geopolitical tensions in the region.
Wandayi assured the public that fuel supplies remain stable despite renewed hostilities involving the United States and Iran, dismissing concerns over potential shortages.
The latest measures come after transport operators staged protests in May over rising fuel prices, underscoring the government’s efforts to contain inflationary pressures and cushion the economy from external energy market shocks.