EPRA increases road maintenance levy by Sh7 per litre

Consumers will now pay a higher road maintenance levy of Sh25 per litre, an increase from the previous rate of Sh18 per litre, following an announcement by the Energy and Petroleum Regulatory Authority (EPRA) on Sunday.

Previously set at Sh18 per litre, the Kenya Roads Board (KRB) proposed a 39 percent increase. Despite this hike, fuel prices saw a slight reduction: petrol dropped by Sh1, diesel by Sh1.50, and kerosene by Sh1.30.

"The prices are inclusive of the 16 percent Value Added Tax (VAT) in line with the provisions of the Finance Act 2023, the Tax Laws (Amendment) Act 2020, and the revised rates for excise duty adjusted for inflation as per Legal Notice No. 194 of 2020," EPRA stated.

Former Roads CS Kipchumba Murkomen addressed public concerns regarding the levy increase, emphasizing that it would not impact fuel prices or the cost of living. He explained that the increase aims to bridge the financing gap for road maintenance, noting that current collections of approximately Sh80 billion annually are insufficient.

Murkomen acknowledged public fears that the levy hike could negatively affect their financial situation. "From the views we have received, many Kenyans are worried that an increase in the levy will result in a rise in the cost of living and fuel prices," he said.

He also warned that without the levy, many roads constructed over the last decade could deteriorate. Contractors are required to maintain roads for three years before handing over the responsibility to the national government. Murkomen argued that it is unreasonable for the government to spend billions on road construction without maintaining them.

Projections indicate that the financial gap could reach Sh315 billion by the 2028-29 financial year. Murkomen highlighted that the country's road network has expanded from 166,451 kilometers in 2016 to the current 239,122 kilometers, necessitating regular maintenance. He noted that many roads under the Low Volume Seal program have not been maintained in the past decade and are at risk of deteriorating.

"The Roads Maintenance Levy Review is intended to address this gap," he said.