Kiharu Member of Parliament Ndindi Nyoro has slammed the government for high fuel prices, arguing that Kenya cannot attribute rising fuel costs solely to external shocks and insisting that domestic policy choices — particularly taxes and levies — continue to drive the final consumer price.
In a strongly worded press address on Friday, May 15, Nyoro called for the immediate reduction of fuel prices, noting that Kenyans are bearing an avoidable financial burden. He criticized the Government’s handling of the ongoing fuel price crisis, arguing that urgent fiscal and policy reforms are needed to ease pressure on consumers and stabilize the economy.
The core of Nyoro's proposal rests on dismantling the structural layers of taxation that have pushed pump prices to record highs. Critics have long argued that Kenya's reliance on petroleum taxation to fill fiscal gaps has created a counterproductive cycle. When the cost of energy rises, the cost of everything else follows—from the price of maize flour to the electricity bills paid by manufacturers.
Nyoro outlined a detailed proposal to reduce fuel prices, arguing that Kenya’s current pump prices are unnecessarily high relative to global market conditions. He cited global oil prices, noting that crude oil had reached over $115 per barrel in 2022, yet domestic pump prices were lower than they are now despite lower international prices. He proposed the removal of the Ksh 7 fuel levy introduced in 2024 and called for an additional reduction in VAT. The lawmaker also proposed an additional injection to the Fuel Stabilization Fund, which would translate to a further reduction in pump prices.
According to the economist, reductions would simply restore fuel taxation and levies to pre-2023 levels rather than introduce new subsidies. He argued that Kenyans are only demanding a reversal of recent tax increases rather than an additional financial burden on the state.
The MP further questioned the government-to-government (G-2-G) fuel import arrangement, alleging that it lacks transparency and benefits a few leaders at the expense of the public.
“Kenyans take note of the fact that global oil prices were higher in 2022, topping $ 115 Per Barell in May 2022, yet pump prices never exceeded KSh 160 per litre of Petrol and Ksh 140 per litre of diesel locally. Global oil prices are cheaper now than in 2022. Why are Kenyans being made to pay more?” asked Nyoro.
He stated that the recent drastic increase in pump prices is unacceptable and warned that failure to act swiftly could deepen economic strain across multiple sectors. According to Nyoro, the current taxation framework is no longer sustainable for a citizenry already reeling from successive years of economic shocks, including drought-induced agricultural deficits and global supply chain disruptions.
The fuel crisis is not a localized inconvenience it is a structural threat to the national economy. In industrial hubs like Nairobi’s Industrial Area and the manufacturing zones of Thika, the cost of diesel acts as a silent tax on productivity. When energy prices surge, manufacturing output slows, and competitiveness against East African Community (EAC) peers diminishes. Business owners, ranging from small-scale matatu operators to large manufacturing firms, find themselves in an impossible position: absorb the rising costs and risk insolvency, or pass them on to consumers, thereby accelerating inflationary pressure.
Economists warn that the current fixation on revenue collection may be inducing a contraction in the broader economy. If the cost of transport rises beyond a critical threshold, the velocity of money decreases, and local trade slows significantly. The impact is most visible in rural counties, where the cost of moving farm produce to urban markets often exceeds the profit margin of the farmers themselves. This effectively discourages agricultural production, creating a vicious cycle of food insecurity and high import reliance.
While the internal debate rages, Kenya remains a price taker in the global energy market. Fluctuations in the Brent crude oil price, coupled with the continued volatility of the Kenyan Shilling against the US Dollar, provide the backdrop for this crisis. The government’s historical reliance on the Petroleum Development Levy has often been criticized by international observers as a stop-gap measure that fails to address the underlying structural dependency on imported refined fuels.
Comparative studies of regional economies suggest that Kenya’s current approach to fuel taxation is among the most aggressive in the EAC. While neighboring nations have utilized various price stabilization funds, Kenya’s shift toward a more liberalized, levy-heavy pricing model has made the local market particularly susceptible to external shocks.
The call for subsidy restoration is not merely a request for state spending it is an acknowledgment that the government has reached the limit of its ability to tax its way to fiscal health. As the Budget and Appropriations Committee moves toward its next round of reviews, the executive will face immense pressure to defend the seven-shilling levy. The government must choose between maintaining its infrastructure investment schedule or preventing a broader economic slowdown caused by prohibitively high fuel prices.
Ultimately, the resolution of this crisis will depend on the government’s willingness to re-prioritize its spending. If the administration refuses to adjust the levy, it risks alienating the very business community and populace it relies on for political stability. Whether the Treasury can find a middle ground—perhaps through targeted subsidies for essential transport sectors rather than a blanket reduction—remains the critical question that will define the political and economic landscape for the remainder of the fiscal year.