MP Ndindi Nyoro on fuel prices
Kiharu MP Ndindi Nyoro proposes cutting VAT on fuel to zero, reducing the fuel levy by KSh 7, and injecting KSh 5B to slash diesel prices by KSh 54 per litre.
The Kiharu MP has laid a comprehensive proposal before Parliament to cut VAT on petroleum to zero, reduce the fuel levy, trim oil-sector margins, and inject a KSh 5 billion diesel subsidy. Arguing that acting now is far cheaper than absorbing the spiral damage of sustained high prices.
Kenya’s cost-of-living conversation reached Parliament this week as Kiharu Member of Parliament Ndindi Nyoro, formally submitted a multi-pronged package of proposals. Notably, designed to bring fuel prices down to levels that ordinary consumers, small businesses, and transport operators have not seen in years.
The proposals, now before the relevant parliamentary committees, are structured around five key interventions. First, Nyoro is calling for the complete elimination of the eight-percent Value Added Tax currently levied on petroleum products, reducing it to zero. Second, he is pushing to cut the Fuel Levy by KSh 7, the exact amount added by the current government in 2024. Third, he is advocating for a reduction in the profit margins allowed to oil importers and distributors. Fourth, he is proposing the injection of an additional KSh 5 billion to specifically subsidize diesel. Fifth, and as a contingency measure in case the government attempts to sidestep the Fuel Levy reduction using a securitisation arrangement. He has also separately written to Parliament seeking a reduction in excise duty on fuel by approximately KSh 7 as well.
“It is better to spend money now to reduce fuel prices than to let the high cost of fuel damage the economy through a spiral effect.”
— Ndindi Nyoro, MP for Kiharu
Why diesel is at the centre of the plan
Of all fuel products, diesel commands the greatest strategic importance in Nyoro’s framework. Diesel powers the matatus, trucks, and freight vehicles that carry Kenya’s entire supply chain. From farm produce leaving the Rift Valley to manufactured goods reaching retail shelves in Mombasa. When diesel prices rise, every downstream product rises with them, compressing household budgets and squeezing micro and small enterprises simultaneously. Nyoro’s modelling suggests that implementing the full package of interventions could bring diesel prices down by approximately KSh 54 per litre. Hence, a reduction that would have an immediate and measurable positive effect across the logistics and agriculture sectors.
Super petrol, which affects private motorists and the growing boda-boda economy, would drop below the KSh 188 per litre mark under the same set of reforms. Thus, a threshold many Kenyans regard as a psychologically important affordability ceiling.
The spiral-effect argument
Nyoro’s central economic reasoning rests on what he terms the spiral effect. High fuel costs do not stay contained within the energy sector. They flow outward, inflating the price of every transported good, raising the operational costs of every business that uses electricity from diesel generators, and ultimately reducing consumer purchasing power across the board. The MP argues that deploying public funds proactively to hold fuel prices at a sustainable level is, in net terms, considerably less expensive than absorbing the compounding economic damage that uncontrolled high prices generate over time.
This framing positions the proposal not as a subsidy in the traditional sense, but as a preemptive investment in macroeconomic stability. A distinction Nyoro has been careful to draw as the proposals move through the parliamentary process.
Parliament responds, what happens next
Parliament has acknowledged receipt of the proposals and directed that the relevant committees begin their review. Nyoro has expressed hope that the process will move in record time, underscoring the urgency of the situation for millions of Kenyans facing elevated transport costs, rising food prices, and shrinking household budgets.
As the committees deliberate, Kenya’s infrastructure and AI-driven logistics sectors are watching closely. Cheaper diesel has implications beyond the pump. It reduces the cost basis for last-mile delivery networks, cold-chain logistics, and the rural connectivity projects that form the backbone of Kenya’s digital-economy ambitions. Lower input costs at this foundational level can accelerate the investment case for the technology and infrastructure projects that the country’s long-term growth depends on.
For now, the proposals are in Parliament’s hands. The speed and outcome of the committee process will determine whether Kenyans see meaningful relief at the pump, or continue absorbing the cumulative toll of one of Africa’s highest effective fuel-tax burdens.
