A decision by the State to increase the Road Maintenance Levy (RML) by 39 percent to Sh25 per litre of petrol and diesel has caused public uproar amid concerns of further financial strains on households and businesses.
The Energy and Petroleum Regulatory Authority (Epra) made a surprise inclusion of a higher RML in the latest petroleum pricing cycle for July 15 to August 14 Sh25 a litre. The tax is collected at the fuel pump and was previously set at Sh18 per litre of petrol and diesel with Sh3 allocated to an annuity fund and the balance to road maintenance, rehabilitation, and development.
The State hopes to raise upwards of Sh115 billion by June next year from the higher RML to boost the pool of funds available to maintain the country’s 239,122-kilometre road network.
Industrialists, motorists, and households Monday criticised the State‘s move to raise the levy, saying it is “ill-timed”.
“We were not in support of the proposal to increase the levy, even the ministry expressed reservations only to see that it has been effected,” said Job Wanjohi, head of policy research and advocacy at Kenya Association of Manufacturers Monday.
“We need a legal opinion on it to understand if it was done right in terms of its implementation.”
Motorists have also questioned the rationale behind the increment of the levy adding that the Ministry of Transport has little to show on how it has deployed billions of shillings raised under levy.
“This (increment of the levy to Sh25 per litre) is despite submitted objections from the stakeholders and the general public,” the Motorist Association of Kenya said Monday.
Some critics have also questioned the legality of the new fuel charge levy, saying due process was not followed in the implementation on the new tax as per the Road Maintenance Levy Fund Act.
For the Levy to take effect, Section 3 of the Road Maintenance Levy Fund Act requires the Cabinet Secretary (CS) responsible for Transport to publish the new rates in the gazette notice.
“The minister (CS) shall, in consultation with the minister for the time being responsible for finance, by order published in the gazette, impose on any or all petroleum fuels entered for home use in Kenya a road maintenance levy (in this Act referred to as “the levy”) which may be determined from time to time and in such manner as the minister may specify in the order,” Section 3 of the Act states.
House rules require all statutory instruments, including the gazette notice for an increase of the RMLF, to be tabled in Parliament within seven days for scrutiny.
“Every Cabinet Secretary responsible for a regulation-making authority shall within seven sitting days after the publication of a statutory instrument, ensure that a copy of the statutory instrument is transmitted to the responsible Clerk for tabling before Parliament,” Section 11 of the Statutory Instruments Act states.
“Every statutory instrument issued, made, or established after the commencement of this Act shall stand referred to the committee or any other committee that may be established for the purpose of reviewing and scrutinizing statutory instruments.”
The law stipulates that the committee may exempt certain statutory instruments or classes of statutory instruments from scrutiny if the committee is satisfied that the scrutiny is not reasonably practical due to the number of regulations in that class
“When a report on a statutory instrument has been tabled in Parliament, the statutory instrument shall be deemed to be annulled if Parliament passes a resolution to that effect,” reads Section 18 of the Act.
The National Assembly approved the report of the Finance and National Planning that recommended an increase of the Levy under Section 3 of the Road Maintenance Levy Fund Act from Sh18 to Sh25 per litre of all petroleum fuels.
“Additionally, the committee observes that the levy has not been varied since 2017 despite the increase in petroleum fuel prices per liter in Kenya over the years and increased cost of road repair and maintenance,” states the report on the scrutiny of the Finance Bill 2024.
