Yesterday, the Kenya Roads Board (KRB) conducted public participation sessions across different parts of the country to review the Road Maintenance Levy Fund (Imposition of Levy) Order, 2016. The Board has proposed amending the order by increasing the Road Maintenance Levy on petrol and diesel from the current Sh18 to Sh25 per litre.
Reasons for Levy Increase
KRB cited the need to raise resources for maintaining the country’s road network as a primary reason for the proposed Sh7 per litre increase. “The value of the road network is estimated at Sh4 trillion. Further investments are needed to protect this asset from deterioration and loss of value,” KRB stated. The financing gap for road maintenance over the next five years is projected to grow to Sh315 billion, with a projected budget allocation of Sh79 billion against an annual requirement of Sh157 billion for the financial year 2024/2025. If the proposed increase is implemented, KRB estimates that the annual revenue from the levy will rise to Sh115 billion, reducing the current deficit.
Impact on Fuel Prices
This increase, however, will directly affect Kenyans as fuel prices will rise correspondingly, adding to the burden on an already strained population.
Government’s Defense
The government defends the levy increase, arguing that good roads will enhance mobility and reduce vehicle operating costs for motorists. “An improved road network will enhance transport efficiency, spurring economic growth,” KRB stated. They also argued that the long-term multiplier effects of government expenditure would outweigh the tax impact on consumption and investment.
Public Feedback and Concerns
At the South Rift KRB offices in Nakuru, only a few Kenyans attended the public participation forum, where they received documents detailing the proposed changes. Participants were required to provide feedback through written memoranda, with some questioning the rationale behind the levy increase.
Call for Accountability
David Njuguna, a Nakuru resident, expressed concerns about the management of resources. “KRB should examine its expenditure first before implementing the proposed changes. There is significant wastage of resources collected under the Ministry of Transport and its road agencies that needs to be addressed,” Njuguna stated.
