The State has cited a significant increase in the road network, weakening of the shilling and high costs of construction inputs as key factors behind the proposal to increase the road maintenance levy (RML) by Sh7 per litre.
Kenya’s road network has grown by 48 percent to 239,121 kilometres between 2016 and this year while the value of the shilling has dropped by at least 25 units against the dollar, euro and sterling pound in the period, leading to a rise in the cost of imported road construction materials.
The Ministry of Roads and Transport proposed to increase RML from Sh18 per litre of super petrol and diesel to Sh25 per litre, to raise an additional Sh32 billion a year to increase funds available for repairing and maintaining the country’s vast road network.
But the proposal, if adopted, is set to increase pump prices to Sh196.84 and Sh180.10 per litre of super petrol and diesel respectively in Nairobi, prompting the government to take a cautionary stance even as it is keen on increasing the levy.
“We’ll explore ways of increasing the levy without increasing the fuel prices even if it means waiting until the petroleum prices come down,” Transport Cabinet Secretary Kipchumba Murkomen said on Monday.
Kenya has 56,187 kilometres of national trunk roads, according to the Countrywide Road Inventory and Condition Survey of 2023, compared to 39,995 km in 2016 while those under counties increased to 182,934 km from 121,456 km in the period.
About 30 percent of the network is in poor state, requiring massive finances to restore them to a maintainable condition.
The shilling has weakened to exchange at 128.5 units to the dollar on Monday compared to 101.08 units in July 2016. It is exchanging at 164.38 units to the sterling pound from 134.18 units and 138.9 units to the euro compared to 112.6 units over the period.
The weakening of the shilling has directly impacted the cost of constructing and maintaining the roads, given the imported materials and also foreign contractors involved.
High pump prices have further led to an increase in road construction works, with a litre of super petrol and diesel going for Sh189.84 and Sh173.10 respectively, compared to Sh108.94 and Sh98.32 respectively in July 2016.
“In comparison with fuel import prices, the RMLF rate has effectively reduced from 64 percent to 16 percent,” the ministry says in a report.
RML collections amount to an estimated Sh83 billion in a financial year and the new rate will move this to Sh115 billion, increasing the pool of funds available to maintain the quality of the country’s roads.
The ministry held public participation on the proposed new rate on Monday, in line with the constitutional requirement that demands for the input of Kenyans in any tax change being adopted.
