Fuel shortage as suppliers stop distribution

Motorists across the country have started feeling the pinch of the 16% VAT tax on petroleum products as most of the fuel pumps run dry.

Many outlets have stopped restocking petroleum products over speculation on the signing into law of the Finance Bill (2018) which seeks to further suspend a 16 per cent Value Added Tax (VAT) for two years.

In Meru, a number of petrol stations remain with limited stock with a majority of them having run out of diesel.

The situation is dire in Tharaka Nithi as only a handful of the fuel filling stations have any stock.

In Embu, a number of outlets have reportedly run out of fuel after their suppliers declined to deliver. Others declined to restock in speculation of a possible fall in prices.

The National Assembly has already passed the Finance Bill (2018) which seeks to defer the implementation of the VAT on fuel contained in the Finance Act (2013).

The Act had deferred the VAT for three years after which the National Assembly in 2016 voted for another postponement of the tax charge for a period of two year ending August 31, 2018. Consequently, the 16 per cent VAT on petroleum products took effect on September 1.

The tax has affected bus fares with some PSV routes charging 25 to 50 per cent above the normal rate.