ABSTRACT
In Kenya, petroleum accounts for 22% of the total primary energy supply, 67% of which is consumed in the transport sector. The rest is consumed mainly in industry and power generation (Aligula 2006).1 In recent years, 2003-2007, Kenya has recorded a substantially increased demand for transport fuels (both diesel and gasoline). Total consumption of petroleum products, about 3.61 million metric tonnes in 2009, is projected to more than triple in line with Vision 2030, Kenya’s blueprint for economic and investment policy. Gasoline and diesel demand were 0.462 million metric tonnes and 1.42 million metric tonnes (year 2009), respectively (KNBS 2010). The balance of about 1.73 million metric tonnes is from jet fuel, illuminating kerosene, fuel oil, and heavy diesel oil (see Table 12-A1 in Appendix 12-1). The gasoline tax is 40, 43, and 28 US cents/liter for motor gasoline super, motor gasoline regular, and automotive gas oil (diesel), respectively (KRA 2007). Motor gasoline super, motor gasoline regular, and gas oil in Kenya are mainly used as transport fuels. Their tax rates therefore take into account transportation as their main use. Other products such as fuel oil (used for power generation), illuminating kerosene (mainly used for cooking and lighting), and heavy diesel oil have lower tax regimes.
