The introduction of the Statute Law (Miscellaneous Amendments) Bill, 2023 has raised concerns over potential increases in fuel and electricity prices. The bill aims to amend the Energy Act of 2019 by doubling the levy charged on these two essential products. Under the proposed changes, the Epra levy could reach a maximum rate of 1 percent as opposed to the current ceiling of 0.5 percent. This move is intended to support the operations of the sector regulator. However, the potential impact on consumers and the economy has sparked worries about the affordability and accessibility of fuel and electricity. As discussions and debates on the bill continue, stakeholders and the public await further clarity on the potential consequences of this proposed increase.
In a move proposed by the Leader of the Majority in Parliament, Kimani Ichung'wah, the Statute Law (Miscellaneous Amendments) Bill suggests the removal of the phrase "half of a percent" from paragraph (a) of Section 20(1) of the Energy Act. Currently, Kenyans are paying a Petroleum Regulatory Levy of Sh0.25 per litre on petrol, diesel, and kerosene, as well as an Epra Levy of Sh0.08 on each unit of electricity consumed. These two levies are crucial sources of revenue for the regulator on an annual basis. The proposed changes to the law have sparked discussions surrounding the potential impacts on the affordability and accessibility of fuel and electricity for the public. As the bill progresses, further deliberations will reveal the implications of these proposed amendments on the regulator's revenues and the cost of these essential commodities for Kenyans.
During the financial year ending in June 2021, the Energy and Petroleum Regulatory Authority (Epra) experienced a notable increase in revenue from the petroleum levy. Epra's earnings from this levy amounted to Sh1.2 billion, marking a 16.5 percent increase from the previous year's figure of Sh1.1 billion. However, revenues from the electricity levy saw a slight decline, totaling Sh236 million, which was 10 percent lower than the previous year's earnings of Sh263 million. Remarkably, the two levies combined, reaching a total of Sh1.45 billion, accounted for an impressive 96 percent of Epra's total revenues for the financial year. These statistics emphasize the significant role played by these levies in supporting the operations and initiatives of the regulatory authority.
In a statement, the Energy and Petroleum Regulatory Authority (Epra) confirmed that they did not receive any government support during the mentioned period. As Epra relies heavily on the revenue generated from the levies, any decrease in the demand for fuel and electricity directly affects their ability to collect revenue. The proposal to double the levies is aimed at strengthening Epra's operational capacity. However, if this proposal is approved, it will result in yet another increase in fuel and electricity prices. This potential price hike adds to the concern about affordability and accessibility of these essential commodities for the general public. As discussions continue, stakeholders and the public eagerly await further developments regarding the proposed increase in levies and its potential impact on pricing.
The timing of this proposal is particularly significant as it coincides with public discontent surrounding the exorbitant cost of fuel. In response to the outcry, the government intervened during the most recent monthly review of fuel prices to stabilize the situation. During this review, the Energy and Petroleum Regulatory Authority (Epra) maintained the price of petrol, offering some respite for consumers. However, the cost of diesel and kerosene was lowered by Sh2 per litre, providing a slight relief for consumers. Consequently, the current retail price of kerosene stands at Sh203.06 per litre at the pump, reflecting an increase of Sh57.12 per litre compared to previous levels. This adjustment prompts further discussions regarding the impact of the proposed levies and their potential implications for fuel prices, further highlighting the need for careful consideration and evaluation of the proposed changes.
The recent review of fuel prices has resulted in significant increases across the board. Kerosene, which now retails at Sh203.06 per litre at the pump, has seen a staggering increase of Sh57.12 per litre compared to its price of Sh145.94 in November of last year. Similarly, petrol prices have skyrocketed, with a surge of Sh40.06 per litre, reaching an all-time high of Sh217.36 compared to Sh177.3 a year ago. Diesel prices have also experienced a sharp rise of Sh41.47 per litre, now retailing at Sh203.47 as opposed to Sh162 previously. Unfortunately, the rise in fuel prices is not the only concern, as power prices remain high following the Authority's approval of new tariffs in April. These continued increases in prices highlight the increasing financial burden on consumers and call for careful consideration and mitigation measures to alleviate the impact on the public.
