The Kenyan government has decided to extend the reduced Value Added Tax (VAT) on petroleum products for another three months, keeping the rate at 8% until mid-October.This move aims to protect households and businesses from escalating global energy costs caused by geopolitical tensions in the Middle East.The initial VAT cut, which lowered the tax from 16% to 8%, was introduced in April due to surging oil prices linked to U.S.-Iran conflicts.Alongside the tax extension, a subsidy package worth 945 million shillings ($7.31 million) will maintain current fuel prices during July-August.

Energy and Petroleum Minister Opiyo Wandayi assured that Kenya has sufficient petroleum supplies despite regional tensions, emphasizing the need to prevent price spikes that could harm the economy.

The decision reflects broader challenges faced by African nations reliant on imported fuel, balancing fiscal responsibility with protecting citizens from inflationary pressures.While the measures provide short-term relief, they raise questions about long-term financial sustainability for Kenya's treasury.