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By:
John Harry Ndeta | |||||||||
| Posted:
Sep,23-2021 04:22:15
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| Households in developing countries are increasingly facing high costs of living and one of the contributing factors is over taxation on fuel. This also has a negative effect on consumption and investment patterns especially for the common mwananchi who is trying make ends meet. The Government of Kenya instituted the Energy Regulatory Commission (ERC) in 2006 now Energy and Petroleum Regulatory Authority (ERPA) to curb the rising fuel prices in the country; but to the contrary, the Authority has every month reviewed the prices upwards to the extent that in this month, we have hit a new high once again with a litre of Petrol going for over Ksh. 135 for the first time in the history of Kenya. One wonders whether we are hording petroleum products or there an artificial shortage of the same necessitating the sharp prices. What we are not told is that the final retail prices are heavily influenced by various government taxes and levies which constitutes about 40% of the total retail price. The person to blame with the current high cost of living is none other than the head of State and Government President Uhuru Kenyatta. While we know that other factors that such as cost of insurance and freight, crude oil price, transportation costs within the country, retailers' and wholesalers' profit margins and refining fee determine fuel price regulation; the EPRA has been become a tool of oppression of Kenyans by the UhuRuto Government. If we removed ERPA and its vested interests in the petroleum industry from the picture, it’s possible that the fuel prices in this country could go to as low as half the current prices. In the latest price determination, ERC said that the average landed cost of imported Super Petrol in the last one month decreased by o.72 per cent from 552.35 US Dollars per cubic meter in July to 548.36 US Dollars per cubic meter in August. Its beyond comprehension how then ERC announces further increases in fuel prices by over Ksh. 7 bob across the country for a whole month. The transport sector is the largest consumer of petroleum products accounting for close to 70% of the total volume of petroleum fuels followed by aviation and power generation while agriculture accounts for slightly more than 1%. However, the relation between fuel and food is such that a significant increase in fuel prices crucially affects the prices of the transported food also which means increased cost of living. An increase in oil price results in an increase in all the associated costs of production, processing, and transportation of food products. In order to offset the increased cost, prices of the products automatically increase and it’s unfortunate that all these is being passed on the tax payer who is the Kenyan citizen. Our leaders know very well that there is long run price relationship between food and fuel prices with an increase in the price of diesel resulting in a significant increase in the price of cabbages, potatoes, bread, milk and virtually every staple food. The passing of Bills and Acts that have allowed for these sharp increases in the fuel prices due to over taxation can only be blamed at the door step of our elected leaders, starting with the President and his Deputy; the Governors, the Senators, the Members of Parliament and the Country Assemblies. Our politicians are the highest paid individuals not just in Kenya but amongst other politicians globally. They have mileage allowance which means they don’t feel the pain at the pump like you and I; they have all manner of tax exemptions and luxuries that other Kenyans don’t enjoy hence do not identify with the plight of the overtaxed Kenyans. No wonder, instead of formulating policies that cushion Kenyans against arbitrary increases in food prices by introducing a tax relief once the fuel prices have reached a certain maximum, all our politicians do is impose more tax which intern leads to increased prices of fuel and all other commodities in the country. Kenyans have a chance to deal with this leader in just under 1 year when we are expected to hold a general election in August 2022. How I pray that our eyes of understanding may be opened and that we can make conscious decision devoid of corruption, tribalism and political shortsightedness ahead of the 2022 polls. In the meantime, since the highest contributor to increased fuel prices is taxation, the Kenya government should consider coming up with a policy of cushioning increase in food prices by introducing a tax relief once the fuel price hits a certain level to ensure fuel prices do not adversely cause sharp increase in the cost of living for the Kenyans. The writer is a Communication and Media Expert harryndeta@gmail.com | |||||||||
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Source:
Ajabu Africa
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