Oil marketers approve stricter kerosene regulations
Key stakeholders from the petroleum and energy sector are calling for tougher kerosene regulations in the form of taxation with a view to contract the prevalent adulteration of fuels in the country.
This is despite Treasury in its earlier presentation of the 2018/19 budget statement to parliament proposing an increased exercise duty levy on the product to combat the vice.
Speaking during the release of the 2018, second quarter petroleum industry insights, Petroleum Institute of East Africa (PIEA) chairperson Anne-Solange Renouard said the notable disparity in taxation between kerosene and other fuel products has left the door open to potential fuel-adulterers.
“We appreciate the increased exercise duty on kerosene by the National Treasury to match the levy on diesel at Sh10.31 per litre. However, there still exists a Ksh19/litre tax difference between the two fuels allowing the vice to remain profitable,” she said.
Kerosene has remained a major component to the fuel adulteration vice owing to its affordability in pricing.
According to the Energy Regulatory Commission (ERC) only five million liters out of 33 million liters of kerosene consumed monthly in the country is used for lighting or cooking, leaving the balance for use in the adulteration of diesel and petrol.
The state department of petroleum has vowed to put an end to the vice stating that sting operations will continue across the country in a view to weed out the costly malpractice.
“I think it’s high time to get rid of this illegal trade. The oil industry has remained opened with over 50 percent of all petrol stations being independently held. This is clear proof that there is a space for everyone willing to engage in a legitimate business practice within the industry,” petroleum principal secretary Andrew Kamau said.
The vice reportedly cost Kenya Revenue Authority (KRA) loses of approximately Ksh34 billion from tax evasion in 2017 alone in addition to causing significant damage on motor-run machinery, properties and the environment.
The government has however responded in kind to the menace with the ERC leading raids on unlicensed petroleum storage facilities over the last month with results being a notable reduction of fuel adulteration from a high of 25 percent down to a near three percent.