The High Court has extended an order restraining an increase in the Road Maintenance Levy (RML) to Sh25 per litre of fuel, turning attention to fuel prices ahead of the new pricing cycle that begins on October 15.
The decision to extend the freeze on a higher RML was made on Monday and will remain in place until October 15, 2024, the day new pump prices come into effect. A similar ruling was first made last month, but was ignored by the energy regulator.
Reducing the RML rate to the previous Sh18 per litre of diesel and petrol may help lower fuel prices as the shilling has held steady against the dollar while global fuel prices have not shot up in the past week.
The Energy and Petroleum Regulatory Authority (Epra) increased the RML in July's fuel prices despite public outcry over the implications of the new rate and promises by the Roads ministry that the imposition of the Sh25 per litre rate would be delayed.
“It is hereby ordered that the respondents are hereby restrained from implementing the Road Maintenance (Imposition of Levy) Order, 2024 until October 7, 2024,” reads the High Court order, which has since been extended to Tuesday next week.
“The orders were extended to October 15 when applications by respondents to set aside the conservatory orders will be heard,” confirmed Cofek chairperson Stephen Mutoro in a text response to this publication.
Epra's move to defy the court order has denied consumers relief at the pump as fuel prices have remained unchanged for the last two monthly cycles—ending months of sustained but marginal price reductions at the pump.
A litre of petrol and diesel currently sells for Sh188.84 and Sh171.60 respectively in Nairobi, prices that could have been lower had Epra complied with the court order.
For example, in the current pricing cycle, the landed cost of diesel fell by 2.95 percent from $693.82 (Sh90,772.47) per cubic metre to $673.36 (Sh87,146.25), while that of petrol fell by 1.53 percent from $708.47 (Sh92,689.13) per cubic metre to $697.62 (Sh90,285.98) over the same period, setting the stage for a drop in local pump prices.
Former Roads and Transport Cabinet Secretary Kipchumba Murkomen had assured Kenyans in July that the new rate of Sh25 per litre would be delayed to ensure that a higher RML did not negate the impact of the shilling's rally on fuel prices.
The ministry held public consultations in 10 regions across the country on July 8, three days after the deadline for submission of the written memorandum on the new RML.
“We can choose to adopt the new taxing policy but delay it until a time when fuel prices are lower in the country to ensure that pump prices remain relatively the same,” Mr Murkomen said during the public hearings.
The Roads ministry and the Kenya Rural Board argued that the levy was increased to raise additional billions of shillings needed to maintain the country’s vast road network.
