CS Wandayi announces KSh945 million fuel subsidy, extends 8% VAT relief until October

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CS Wandayi announces KSh945 million fuel subsidy, extends 8% VAT relief until October

The government has re-assured Kenyans that the country has adequate supply of fuel, even as the crisis in the Middle East — which has led to the closure of the critical Strait of Hormuz — gets worse.

Energy and Petroleum Cabinet Secretary Opiyo Wandayi says the government remained steadfast in ensuring petroleum products remain as a affordable as possible under the prevailing global markets conditions.

It is for the reason of protecting fuel consumers, supporting businesses and the need to safeguard the country’s economy from external shocks that the government has extended the application period for 8% of VAT on petroleum products for a further three months, until October 14, 2026.

“Further, in the July-August 2026 pricing cycle, the Government will deploy a subsidy from the Petroleum Development Levy to the tune of KSh945 Million to sustain the current price levels,” CS Wandayi said in a statement on Tuesday, July 14.

Wandayi assured that the President William Ruto-led government had built a more resilient petroleum sector that is better equipped to withstand external shocks and vilatilities.

“The systems, partnerships and strategic interventions we have put in place over the past few years continue to provide confidence that Kenya can maintain a reliable and uninterrupted fuel supply, even as global markets experience heightened volatility,” CS Wandayi added.

The crisis in Middle East has seen renewed military escalation around the Strait of Hormuz, the world’s most critical maritime energy chokepoint, connecting the Persian Gulf to the Gulf of Oman, handling approximately 20% of global petroleum supply and over 25% of liquefied natural gas (LNG) traded worldwide.

Recent days has seen attacks on commercial vessels, reduced oil tanker traffic through the strait to its lowest level, and a heightened uncertainty across international markets.

However, CS Wandayi has lauded Kenya’s Government-to-Government arrangement for stabilising positively the country’s fuel supply chain.

Under the deal, cargoes have continued to be sourced from a wider set of loading regions beyond the Gulf, every scheduled cargo has arrived and offloaded on time, and fuel has remained available at the pump throughout the country.

This Ministry will continue to work closely with the industry to keep supply consistent and uninterrupted, to defend the fixed terms of our Government-to- Government arrangement, and to keep Kenyans fully and openly informed as the picture continues to develop.”

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