Fuel levy fund is distributed equally, Transport CS Kipchumba Murkomen tells MPs

Transport Cabinet Secretary Kipchumba Murkomen has clarified that the fuel levy is distributed equally across all constituencies.

The CS was responding to questions from Members of Parliament (MPs) on the fuel levy fund, challenges and the way forward for projects funded under the Development Vote.

His response came a month after the Kenya Roads Board (KRB) sought to increase the road maintenance levy by Sh5 to cover inflation in the cost of road construction materials.

The levy, commonly referred to as the Road Maintenance Levy Fund, is collected at the pump and is currently set at Sh18 per litre of petrol and diesel, with Sh3 going to the annuity fund and the balance to road maintenance, rehabilitation and development.

This means that motorists would pay Sh23 per litre of fuel at the pump if the proposal is approved, raising the overall cost of the commodity.

Road maintenance

He said the fuel levy has been the main source of funding for road maintenance. The levy is charged on specified petroleum products in shillings per litre and the rate has evolved to the current level of 18 shillings per litre.

"In short, the collection of fuel levy has stopped increasing and in the worst case scenario may even decrease going forward. This situation will not improve if electric mobility picks up quickly as anticipated," he said.

According to Mr Murkomen, while the rate of the fuel levy has remained static for about seven years, inflation has continued to reduce the purchasing power of the amount collected.

The CS said the ministry was ensuring prompt, simultaneous and adequate disbursement of RMLF funds to all constituencies to enable timely tendering and commencement of works.

"It therefore means that each honourable member here is overseeing over Sh64 million which is being distributed equally to all constituencies," he said.

He said the ministry, through KRB, continuously reviews applications from county governments to transfer county roads that have attained national status.

"The KRB reviews these applications and subsequently transfers more roads to various road agencies for construction and maintenance, which puts more pressure on the little resources we have," he added.

Mr Murkomen, while addressing the basic principles of fund allocation under the development vote, said it was not true that the Ministry of Roads or its agencies were in any way marginalising any part of the country. Instead, the Ministry works hand in hand with this August House to ensure that resources are distributed fairly across the country.

Budget deficit

"The State Department of Roads has a significant budget deficit leading to inadequate allocations for road projects," he said.

He said that in the current Financial Year, the net GoK allocation to the State Department of Roads is Sh76 billion against a request to the National Treasury of Sh250 billion. "The State Department therefore started the financial year with a budget shortfall of 70 percent," Murkomen said. 

"During the 1st Supplementary Budget 2023/2024, the Sh76 billion was reduced by Sh15 billion and now stands at Sh61 billion. Out of the allocated Sh61 billion, an amount of Sh46 billion has been allocated for road development and the balance for road maintenance under the development budget."

He said as of September 30, 2023, a quarter of the Sh76 billion, amounting to Sh19 billion, was expected to have been released. However, as of September 30, 2023, only Sh6 billion had been released.

"The delayed release of funds has also contributed to the stalling of road projects and interfered with the planning of project implementation by contractors," Murkomen said.

He assured legislators that the government was implementing a realistic plan to address the road financing challenges.

He said that the government had approached bilateral and multilateral development partners to access concessional funding to complete development roads.

"There are ongoing discussions that are at an advanced stage and we are optimistic that this will help our course in a big way."

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