The government has significantly increased the EPRA Levy, spelling more agony for consumers as many struggle to cope with biting economic challenges and a raft of punitive tax measures.
Consumers of fuel will now pay triple tax to the Energy and Petroleum Regulatory Authority (Epra) for every litre of fuel purchased. The Petroleum Regulatory Levy has been increased to Sh0.75 per litre, up from Sh0.25.
The EPRA levy is one of nine taxes and levies that are charged on fuel and has been increased to fund the operations of the energy regulator.
other taxes currently in effect include; excise duty, Road Maintenance Levy, Petroleum Development Levy, Railway Development Levy, Anti-Adulteration Levy, Merchant Shipping Levy, Import Declaration Fee, and Value Added Tax (VAT).
Energy Cabinet Secretary Davis Chirchir last week published the Energy (Energy and Petroleum Regulatory Authority Petroleum Levy) Regulations, 2024 giving effect to the new charge.
“These regulations shall…come into operation on February 15, 2024. The Energy Act (Petroleum Regulation Levy) Order, 2018 is revoked,” said Mr Chirchir.
The petroleum levy contributes 80.7 percent of Epra’s total revenue. The regulator made revenues amounting to Sh1.51 billion in the year to June 2021, out of which Sh1.21 billion came from the levy. Epra Levy also generates revenue from a regulatory component contained in the electricity bill as well as revenue from licensing. During that year, Epra made Sh236.69 million from the electricity levy.
Kenyans consumed 4.649 billion litres of fuel in 2023, according to data from Epra. This indicates that the regulator collected roughly Sh1.16 billion levy.
Last week, EPRA set prices of fuel at Sh195.47 per litre of diesel and Sh206.36 per litre of super petrol in Nairobi, down from Sh196.47 and Sh207.36 respectively. Fuel consumers could soon be hit with further price increases if proposals by the Kenya Roads Board (KRB) are approved.
Implications Of The EPRA Levy
In its latest strategic plan, KRB argued for the increment of the EPRA Levy by proposing a Sh5 a litre raise on Road Maintenance Fuel Levy (RMFL) arguing that the cost of maintaining roads in the country has shot up substantially from costlier fuel prices to the cost of key road construction materials including tar and bitumen and is expected to impact the cost of periodic road maintenance by road agencies in the 2023/24 fiscal year which commenced July 1.
The RFML is a tax collected at the fuel pump and is currently set at Sh18 per litre of petrol and diesel with Sh3 allocated to an annuity fund and the balance to road maintenance, rehabilitation, and development.
EPRA Levy For Infrastructural Funding
The cost of periodic maintenance per kilometre by KeNHA is expected to move from Sh3.94 million to Sh6.06 million in the current financial year, according to data from KRB.
“There has been an increase in periodic maintenance cost by about 35 per cent attributable to the uptake of roads with failed payments and increase in price construction materials mainly due to rise in fuel prices,” KRB noted in a summary of its 2023/24 annual public roads programme (APRP).
The State has over the years maintained the country’s road network through the Kenya Roads Board Fund (KRBF), which is mainly financed through the proceeds of the RMLF as well as transit tolls.
Records show that in the five years from 2018–2022, KRB spent Sh309.74 billion on road maintenance, rehabilitation, and development programmes, excluding the Road Annuity Fund.
In the five years from 2018–2022, KRB spent Sh309.74 billion on road maintenance, rehabilitation, and development programmes, excluding the Road Annuity Fund.
These amounts consisted of Sh128.37 billion to KeNHA, Kerra (84.95 billion), Kura (Sh35.24 billion), KWS (Sh31.36 billion), county governments (Sh26.69 billion) and a Sh31.36 billion allocation through the Transport Cabinet Secretary.
KRB has allocated KeNHA Sh33.6 billion in the current financial year for road works.
