After Ruto's signature, here are the new powers Kenya's Treasury CS now has over fuel tax

When President William Ruto assented to the Value Added Tax (Amendment) Bill 2026 on April 17, 2026, Treasury CS John Mbadi acquired new sweeping powers over Kenya’s fuel tax laws.

The new law amends Section 6 of the VAT Act to permit the Treasury Cabinet Secretary to vary VAT on petroleum products beyond the previous cap.

That change carries more weight than it sounds.

Under Section 6(1) of the VAT Act, the Treasury Cabinet Secretary could only vary VAT by up to 4 percentage points.

Since the standard VAT rate on petroleum is 16 per cent, the CS could administratively reduce it to no lower than 12 per cent, without involving Parliament.

Any cut beyond that needed a new law.

The Amendment Bill dismantles that ceiling.

The revised VAT rate will apply for 90 days, with provisions allowing the Treasury to extend the period by a further 90 days if the fuel crisis persists.

In practical terms, Mbadi can now set VAT on petroleum at 8 per cent and, without returning to Parliament, extend that rate for another three months if circumstances warrant it.

Without the amendment, the latest fuel price changes would have been illegal.

The Treasury CS had already issued Legal Notice No. 69 on April 14, 2026, cutting VAT from 16 per cent to 13 per cent - a reduction well within his existing powers.

A day later, Legal Notice No. 70 pushed the rate further down to 8 per cent, a move that went beyond the legal limit and required parliamentary backing to stand.

The Bill, sponsored by National Assembly Majority Leader Kimani Ichung'wah, was moved in the House by Deputy Majority Leader Owen Baya on April 16, 2026.

In a record one hour, Members of Parliament debated and passed the Bill, effectively legalising the Treasury's directive to cut VAT by 50 per cent.

The direct result of Mbadi's legal notices, now backed by the new law, is visible at the pump.

In Nairobi, motorists now pay Sh197.60 per litre for super petrol, Sh196.63 for diesel, and Sh152.78 for kerosene.

Petrol fell by Sh9.37 per litre and diesel by Sh10.21.

Kerosene pump prices were not reduced, though the level of subsidy on kerosene was reduced from Sh108.10 to Sh96.56 per litre.

The revised prices apply through May 14, 2026.

The amendment is narrow.

It applies only to petroleum products and only for the current 90-day window, extendable by a further 90 days at the CS's discretion.

The standard 16 per cent VAT rate on all other goods and services is untouched.

The CS cannot use this amendment to adjust VAT on anything outside petroleum.

The 90-day period expires in mid-July 2026.

If global oil prices stabilise before then, the cut lapses.

If they remain volatile, Mbadi now has the legal authority to keep it in place without a fresh parliamentary vote.