House Team Approves Increase in Road Maintenance Levy Fund Despite Concerns Over Fuel Prices

The House team has given the green light to the Road Maintenance Levy Fund (Imposition of Levy) Order, 2024, which seeks to raise the Road Maintenance Levy rate from Sh18 to Sh25 per litre of petrol and diesel.

This decision comes despite widespread concerns that any increase in fuel levies could ultimately lead to a rise in the cost of fuel and exacerbate the financial burden on Kenyans already grappling with high living costs.

The approval was given after a careful review by the Committee on Delegated Legislation, which is chaired by Ainabkoi MP Samuel Chepkong’a.

The committee had initially raised concerns that an increase in the fuel levy could lead to a hike in fuel prices, which could have disastrous effects on the cost of living.

“Considering the tough economic times, it will be inconsiderate of us to approve an order that will see a hike in the price of fuel,” Chepkong’a remarked.

Committee Vice Chair Robert Gichimu echoed these concerns, pointing out that higher fuel prices could lead to increased prices for food and other essential commodities, which would be particularly problematic for many households in Kenya.

However, the committee’s reservations were alleviated after a presentation from the State Department of Roads. Principal Secretary Joseph Mbugua reassured the lawmakers that the increase in the road maintenance levy would not lead to any increase in fuel pump prices.

“We are confirming to Kenyans that there will be no increase in the price of fuel. We have measures in place to increase the levy without raising the cost of fuel beyond the current prices,” Mbugua stated.

Mbugua was accompanied by senior officials, including Director Generals Rashid Mohamed of the Kenya Roads Board, Silas Kinoti of the Kenya Urban Roads Authority, and Philemon Kandie of the Kenya Rural Roads Authority, who all supported the proposed changes.

The increase in the Road Maintenance Levy is seen as a necessary measure to address the stagnation in road maintenance funding.

The current rate of Sh18 per litre has remained unchanged since 2016, despite significant growth in the national road network, from 161,451 kilometers in 2016 to 239,122 kilometers in 2024.

The amount collected through the levy, which has remained around Sh80 billion per year, is no longer sufficient to maintain and rehabilitate the country’s roads, according to Mbugua.

The increase, which will raise the collection rate to Sh25 per litre, is expected to generate over Sh115 billion by June 2025.

This additional revenue is seen as critical to supporting the maintenance and improvement of Kenya’s growing road network, particularly as construction costs continue to rise due to inflation and the depreciation of the Kenyan shilling.

While the increase in the levy has been met with opposition from various stakeholders, who argue that it could lead to an unmanageable cost of living crisis, the Ministry of Transport maintains that the move is necessary to ensure the sustainability and safety of the country’s road infrastructure.

Despite these concerns, the legal notice was endorsed with the understanding that it would not result in higher fuel prices.

However, the implementation of the new levy rate will likely continue to be a contentious issue, particularly as the government seeks to balance road infrastructure development with the economic realities faced by ordinary Kenyans.