Kenyan authorities have introduced new legislation designed to reduce fuel expenses, with the National Treasury calling for a substantial decrease in road maintenance fees.
According to the proposed legislation, the Treasury aims to decrease the allocation from Sh3 to Sh1.50 per liter of fuel, a change that could result in decreased pump prices if Parliament ratifies the amendment.
The recommendation is outlined in the Road Maintenance Levy Fund (Amendment) Bill, 2026, which focuses on modifications to Section 3(2) of the Road Maintenance Levy Fund Act (Cap 427).
“The section is revised in subsection (2) by removing the phrase ‘three shillings’ and replacing it with ‘one shilling and fifty cents,'” the Bill states in part.
The revision specifically targets the portion of the levy allocated to the Road Annuity Fund, which funds road construction projects under the Road Annuity Programme and other initiatives sanctioned by the National Assembly.
If implemented, the modification would effectively decrease the levy component on each liter of petrol and diesel sold in the country by Sh1.50. This occurs amidst persistently high fuel prices, with petrol currently priced at Sh197.6 per liter in the most recent pricing period.
Treasury officials indicate that the reduction would offer immediate relief to consumers at gas stations without compromising the overall road maintenance system, since only a particular segment within the levy is being modified rather than the entire charge.
The cabinet secretary maintains the authority under Section 3(1) of the Act to adjust the total levy through a Gazette notice, providing additional versatility in controlling fuel expenses.
The proposed revision represents the most recent in a sequence of measures by President William Ruto’s government intended to protect Kenyans from the effects of climbing global oil prices, which have strained transportation costs, food prices and total household expenditures.
Just prior to the Bill’s introduction, Parliament approved the Value Added Tax (Amendment) Bill, 2026, reducing VAT on petroleum products from 16 percent to 8 percent.
The tax reduction, which has already been signed by President Ruto, constitutes a temporary measure lasting 90 days, with the possibility of extension for an additional three months depending on global market conditions.
The combined impact of the VAT decrease and the proposed levy reduction could substantially lower fuel prices, though other mandatory charges will remain.
Besides tax measures, the government has also utilized the Petroleum Development Levy (PDL) Fund to protect consumers. A total of Sh6.2 billion has been allocated to stabilize pump prices amidst global fluctuations.
Energy Cabinet Secretary Opiyo Wandayi mentioned that the intervention prevented more significant increases in fuel expenses.
“Everyone witnessed that fuel prices rose, but rest assured. Despite price increases, the national government implemented strategic measures. Initially, we introduced a Sh6.2 billion subsidy; prices would have risen much more,” he stated.
The administration has also continued depending on the Government-to-Government (G-to-G) fuel import system, which President Ruto has commended for ensuring consistent supply and competitive pricing despite disruptions in global oil markets, especially in the Middle East.
Focus now turns to Members of Parliament, who must debate and approve the Road Maintenance Levy Fund modification. With the VAT reduction already active and subsidy measures in place, the proposed levy decrease marks the third major initiative within a brief timeframe.
The government has encountered growing criticism regarding expensive fuel, with recent measures viewed as part of a wider strategy to provide sustained price relief.
Nevertheless, analysts point out that the Cabinet Secretary’s authority to adjust the levy through Gazette orders implies that the relief may not be lasting unless firmly established in legislation.
Even with this, the bill gives fresh optimism to consumers that fuel prices could decline further in upcoming months, potentially reducing the cost of living across numerous economic sectors.