Kenyan households and businesses are set to benefit from reduced fuel costs after William Ruto signed into law the Value Added Tax (Amendment) Bill (National Assembly Bill No. 21 of 2026), cutting VAT on petroleum products from 16 per cent to 8 per cent.

The move, fast-tracked by the National Assembly of Kenya, comes amid rising global supply pressures linked to instability in the Middle East, which have pushed up energy prices.

The legislation, sponsored by Majority Leader Kimani Ichung’wah, was introduced and passed on April 16, 2026, without amendments following a request from the Executive for urgent intervention to stabilise fuel prices.

Under the new law, the reduced VAT rate will apply for an initial period of 90 days starting April 15, 2026. The Cabinet Secretary for the National Treasury has also been granted powers to extend the relief for an additional 90 days if necessary, depending on global market conditions.

The government says the tax cut will have an immediate impact at the pump, projecting a drop in the price of super petrol by KSh 9.37 per litre and diesel by KSh 10.21 per litre.

Officials argue the measure is aimed at cushioning Kenyans from the ripple effects of high fuel costs, which typically drive up the prices of transport, food, and other essential goods.

“An escalation of the cost of fuel has a knock-on effect on the cost of consumer goods and services. This reduction is meaningful and shall significantly ease the burden on Kenyan households,” a government brief noted.

The intervention is part of broader efforts by the government to contain the rising cost of living and shield the economy from external shocks, with fuel prices remaining a key driver of inflation in the country.