Counties bag Sh10.5bn from fuel tax for road upgrades
Thika Superhighway in a photo taken on November 15, 2020.
What you need to know:
- The State has over the years maintained the country’s road network through the Kenya Roads Board Fund.
- The law requires the KRB to allocate at least 22 per cent of RFML and road toll collections for use in the development and upkeep of roads in all the constituencies.
The 47 counties will be allocated Sh10.5 billion from the Road Maintenance Fuel Levy (RMFL) purse in the new financial year starting July for maintenance of roads within their locations, the Treasury has revealed.
The RFML is a tax collected at the oil pump and is currently set at Sh18 per litre of petrol and diesel with Sh3 set aside to an annuity fund and the balance to road maintenance, rehabilitation, and development.
“The summit resolution of February 2023 stipulated the need to develop a reform agenda for the road sector so that the RMFL allocation to the county governments is considered in the financial year 2024/25 through a restructured process,” Treasury said in its newly published Budget Policy Statement for 2024.
“In this regard, a consensus has since been reached that, Sh10.522 billion being allocation for maintenance of county roads from RMFL be allocated as a conditional allocation to county governments,” it added.
The State has over the years maintained the country’s road network through the Kenya Roads Board Fund (KRBF), which is mainly financed through the proceeds of the RMLF as well as transit tolls.
The KRBF has been distributed among the road agencies charged with the maintenance including Kenya National Highways Authority (Kenha), Kenya Urban Roads Authority(Kura), Kenya Rural Roads Authority (Kerra), Kenya Wildlife Services(KWS), and the county governments.
The law requires the KRB to allocate at least 22 per cent of RFML and road toll collections for use in the development and upkeep of roads in all the constituencies.
The agency is also required to set aside at least 10 per cent of its collections for roads linking constituencies and administered by Kerra.
Records show that in the five years from 2018–2022, KRB spent Sh309.74 billion on road maintenance, rehabilitation, and development programmes, excluding the Road Annuity Fund.
These amounts consisted of Sh128.37billion to Kenha, Kerra (84.95billion), KURA (Sh35.24 billion), KWS (Sh31.36 billion), county governments (Sh26.69 billion) and a Sh31.36 billion allocation through the Transport Cabinet Secretary.
KRB in its latest strategic plan proposes a Sh5 a litre raise on RMFL arguing that the cost of maintaining roads in the country has shot up substantially from costlier fuel prices to the cost of key road construction materials including tar and bitumen and is expected to impact the cost of periodic road maintenance by road agencies in the 2023/24 fiscal year which commenced July 1.
