The National Assembly approved the Tax Laws Amendment Bill that seeks to maintain the reduced Value Added Tax rate of 8% on petroleum products, down from the standard 16%.

Introduced by Majority Leader Kimani Ichungw’a, the amendment extends the relief first introduced in April 2026 for an additional 90 days, with the current expiry set for 15 October 2026.

Ichungw’a said the extension aims to cushion consumers while the conflict in the Middle East, which is driving global oil prices, remains unresolved, and gave the Treasury Cabinet Secretary authority to further extend the rate if needed.

The bill cleared its third reading on Wednesday with bipartisan support and now awaits presidential assent before becoming law.

If enacted, an amendment to Section 5 of the VAT Act will keep the 8% rate on super‑petrol, kerosene and diesel for the next six months, subject to any further extension by the cabinet secretary.

Finance and National Planning Committee Chairman Kimani Kuria said the extension is necessary to protect Kenyans from rising fuel costs and their knock‑on effects on transport, production and living expenses.

A minority of legislators, including MP Caroli Omondi, warned that the government should revert to an open‑tender system for fuel imports even as they support the VAT reduction.

The Energy and Petroleum Regulatory Authority’s latest fuel review, released on 14 October, showed that despite the 8% VAT, prices rose sharply in the 15 Oct‑14 Nov cycle, with super‑petrol up Ksh 12.93 per litre, diesel Ksh 9.90 and kerosene Ksh 28.49.

EPRA attributed the price increase to higher global oil prices that raised the landed cost of imported fuels.