Members of Parliament has recommended reduction in Petroleum Development Levy (PDL) charged on Super Petrol and Diesel.
In a report, the National Assembly Finance and Planning Committee also proposed the revocation of the PDL Order, 2020 (Legal Notice No. 124 and 174 of 2020) which provides for the levy.
“…and ammend the Petroleum Development Fund Act 1991, by providing the amount that shall be charged to the PDL per litre of Super Petrol and Diesel,” read the report.
The committee led by Homa Bay Woman Representative Gladys Wanga are proposing to reduce the PDL charged on each litre of Super Petrol and Diesel from Sh5.40 to Sh2.90.
Additionally, the committee has also recommended the reduction in Value Added Tax from 8 per cent to 4 per cent and VAT on LPG from 16 per cent to 8 per cent.
Further, the MPs proposed that the gross margins of oil marketing companies be reduced to Sh9 from the current Sh12 per litre.
The committee also proposed a waiver on inflation adjustment on fuel for the financial year 2021/22.
“Inflation adjustment on fuel shall be done biennially and shall be determined by the National Assembly through the Finance Bill,” stated the report.
According to the committee, the petroleum fund shall be managed by a board similar to the Roads Maintenance Levy.
The Fund shall also be used for stabilization of fuel prices and for matters relating to the development of common facilities for distribution or testing oil products and establish a formula for distribution of money from the fund to oil marketing companies.