The energy regulator- EPRA is facing a legal test ahead of Friday’s pump price review following a court order that froze the doubling of Value Added Tax (VAT) on fuel to 16 percent.
The Energy and Petroleum Regulatory Authority (Epra) will on Friday announce the new prices that will be in force until August 14, with consumers keen to see if VAT will be lowered to eight percent in line with a court order.
The High Court suspended all taxation contained in the Finance Act, 2023, a move that barred Epra from effecting the new fuel VAT.
The court’s decision has since thrown oil marketers into a spin with some opting to retain VAT on fuel at eight percent amid fears they will be sued for implementing a tax declared illegal.
Pump prices shot to a historic high of Sh195.53 and Sh179.67 per litre of Super and diesel respectively in Nairobi from July 1, following the review.
Petitioners who successfully sought suspension of the Finance Act, 2023 have additionally asked the court to punish Epra for contempt.
“People do not want to end up in court, that is why some have retained VAT at eight percent but others have doubled it. We are caught in between because someone can take you to court using the receipt you issued,” said an oil marketer who sought anonymity.
Petitioners led by Busia Senator Okiya Omtatah say there was no concurrence of both Speakers of the National Assembly and Senate on matters relating to counties and that the tabling of the Finance Bill was done without following due process.
Attorney General Justin Muturi had sought suspension of the court order, arguing that the conservatory order threatens to freeze government operations.
