MP proposes faster, mid-term fuel price reviews in crises

A new proposal to amend the Petroleum Act 2019 has been put across to allow for mid-cycle review of fuel prices, especially in emergency pricing periods where global disruptions occur.

Rongo MP, Paul Abuor, has written to the Clerk of the National Assembly notifying him of the proposed amendment, saying that in times of global uncertainty, the country’s systems must respond with speed and fairness.

Abuor is proposing a targeted amendment to allow the Cabinet Secretary responsible for energy, in consultation with the Energy and Petroleum Regulatory Authority (EPRA), to formally declare an emergency pricing period where global disruptions occur.

He has also proposed the need to allow fuel price reviews every 14 days during declared emergencies, ensure faster transmission of price reductions and prohibit any mid-cycle price increases. 

“During this period, prices will only go down or remain stable and never rise mid-cycle. As we speak, we do not have any position that can allow for mid-term review before 30 days end and that is what we are trying to cure. We know that we normally review prices every 30 days, but we are trying to put in a mechanism where when the prices drop, the consumers can get immediate benefit,” he said in a press conference in Parliament yesterday.

He said the proposal is designed to protect the supply chain as follows: where the existing pricing formula remains unchanged, loaded cost and stock positions will be considered and no adjustments will be made that risk supply disruptions or financial distress. 

This is not price control. We will take into consideration the existing pricing formula, landed cost and stock. What EPRA normally does is that by the time they are doing their pricing, they consider all the stocks being held in the country and the cost at which they were brought in. My proposal is just improving on timing; instead of waiting for 30 days, we want to have a mechanism to review within 14 days and only in cases where there are emergencies like now,” he explained.

According to the MP, it might take about 10-12 days for a ship to dock in Mombasa and then the fuel is put into the system and it is not fair for consumers to get those benefits because these are not ordinary times.

“We are living in an extremely difficult position, so we have to be proactive. People have said that we should put pressure on the Government to do away with Value Added Tax and reduce some levies, but we also have to be more proactive. This reform will deliver faster relief when global prices fall, improve fairness and transparency in pricing, and also reduce pressure on households and businesses.  In terms of global uncertainties, our system must respond with speed and fairness,” he explained.

He emphasised that the reforms are designed to strike a balance between consumer protection and industry stability and oil marketers would still operate under the current framework, with safeguards to prevent financial distress or supply disruptions.

The MP has already tabled the proposal and initiated consultations with the Ministry of Energy, EPRA, and other industry stakeholders, including oil marketers, to refine the amendment before formal consideration and was optimistic that the proposal would receive bipartisan support, noting that it offers a “balanced, practical solution” in uncertain economic times.

If adopted, the changes could mark a significant shift in Kenya’s fuel pricing regime, giving regulators greater flexibility to respond to global price movements and potentially bringing quicker relief to consumers at the pump.

Abuor’s proposal comes against the backdrop of heightened global market uncertainty linked to geopolitical tensions and risks to key supply routes, which have contributed to fluctuating oil prices.

He said the proposal is different from the Value Added Tax (Amendment) Bill, 2026, which was assented to last week to effectively slash VAT on petroleum products from 16 per cent to 8 per cent in a move aimed at quelling the uproar that arose following the recent sharp hike in fuel prices. 

The Bill, sponsored by National Assembly Majority Leader Kimani Ichung'wah, followed a request from the Executive to urgently address the impact of the ongoing conflict in the Middle East on petroleum supply.

The new law amends Section 6 of the VAT Act to permit the Treasury Cabinet Secretary to vary VAT on petroleum products beyond the previous capping, in a bid to ease fuel costs in the midst of the Middle East crisis.

Previously, the Act allowed the Treasury Cabinet Secretary to adjust VAT by up to 25 per cent of the standard rate of 16 per cent, but the President said that the 25 per cent cap was insufficient to cushion Kenyans from rising fuel prices.