Kenya's Road Levy hits Sh90.5 billion, fueled by controversial tax hike
Official data shows this is a rise of Sh29.3 billion compared to Sh61.18 billion raised in the same period the previous year.
The government collected Sh90.54 billion from motorists in road maintenance levies in the nine months to March, driven by a controversial increase in fuel tax that pushed pump prices higher and forced the State into periodic price subsidies.
Official data shows this is a rise of Sh29.3 billion compared to Sh61.18 billion raised in the same period the previous year.
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The increase follows a hike in the Road Maintenance Levy from Sh18 to Sh25 per litre in July last year, despite an earlier pledge by then Transport Cabinet Secretary Kipchumba Murkomen that the adjustment would wait until fuel prices dropped.
The levy, charged per litre of petrol and diesel, rose as fuel consumption went up to 3.62 billion litres during the period, up from 3.39 billion litres in a similar window the year before.
This boosted collections as both diesel and petrol usage recorded notable increases.
The decision to raise the levy sparked public outcry, especially as motorists continued to grapple with high fuel costs.
However, the ministry later approved the Sh7 per litre increase, siding with the Kenya Roads Board (KRB), which manages the levy.
KRB had insisted on the adjustment, saying more funds were needed to maintain the country’s expanding road network.
The board had proposed an even steeper increase to Sh34 per litre to meet the road system’s financial needs.
“To address the funding shortfall, it is proposed that the RMLF rate be revised upwards, effective July 2024. Based on the annual maintenance requirement of Sh157 billion, the ideal fuel levy rate ought to be set at Sh34/litre,” KRB noted in its proposal.
The higher levy has prevented the full benefits of global fuel price reductions from reaching consumers, with the government occasionally stepping in to subsidise pump prices to ease pressure on households and businesses.
According to the Energy and Petroleum Regulatory Authority, diesel consumption hit two billion litres in the nine months to March this year, up from 1.91 billion litres in the same period last year.
This raised road levy collections on diesel from Sh34.39 billion to an estimated Sh50.12 billion.
Petrol consumption also rose, reaching 1.62 billion litres, up from 1.48 billion litres the previous year. This resulted in collections increasing from Sh26.78 billion to Sh40.42 billion.
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