Explainer
From Pump to Pavement: How Kenya’s KSh 25 Fuel Levy Is Collected and Spent
IN BRIEF
When you fill your petrol tank in Kenya, KSh 25 of every litre goes directly to maintaining roads. Here is how that money moves through the state system.
Read on for the full picture
- Who is involved?
- Kenyan motorists, commuters and transport companies pay the levy through fuel purchases.
- What happened?
- The Road Maintenance Levy collects a dedicated tax on every litre of fuel to fund road repairs across Kenya.
- When did it happen?
- The levy was raised to KSh 25 per litre in July 2024 and continues to collect revenue daily at the pump.
- Where is this happening?
- Collection happens across all fuel stations in Kenya, funding roads in urban, rural and highway networks.
- Why does it matter?
- Dedicated fuel taxation ensures a continuous revenue stream specifically earmarked for road maintenance.
- How does it work?
- Tax authorities collect KSh 25 per litre on fuel and hand it to the Kenya Roads Board to split among road agencies.
Every time you pull into a petrol station and tell the attendant to fill up your tank, you are not just paying for fuel.
Inside every litre of petrol or diesel sold in the country sits a specific charge called the Road Maintenance Levy. It is a dedicated tax collected at the pump and funnelled directly into maintaining national, county and urban roads.
In July 2024, the Ministry of Energy and Petroleum increased this levy from KSh 18 to KSh 25 per litre. That KSh 7 bump raised fuel prices overnight, but it also opened up a massive revenue stream for the exchequer.
So, how does money move from a local petrol pump to a newly patched tarmac highway? Here is how the mechanics of the Road Maintenance Levy Fund actually work.
How is the money collected?
The process begins at the port of entry or at the energy depots. When oil marketing companies import refined petroleum products into Kenya, the government assesses taxes and levies via the Energy and Petroleum Regulatory Authority and the Kenya Revenue Authority.
The Road Maintenance Levy is charged as a flat fee on every litre of petrol and diesel sold for local consumption.
When you purchase 40 litres of petrol at a pump in Nairobi, Mombasa or Kisumu, KSh 1,000 of your final bill goes straight to this levy. The fuel station passes this money to the oil marketer, who remits it directly to the state through the tax authority.
The funds do not vanish into the national government's general revenue pot. Instead, by law, they are deposited into a dedicated statutory account: the Road Maintenance Levy Fund.
Who gets a share of the cash?
The distribution of the levy is governed by the Kenya Roads Act and administered by the Kenya Roads Board.
The Kenya Roads Board acts as the central clearinghouse. It manages the fund, evaluates road maintenance programmes, and distributes the collected money to various road agencies according to strict legal ratios.
Under the statutory allocation formula, the money is split among key implementers:
- Kenya National Highways Authority: Receives the largest chunk to manage major arterial highways, class A, B and C roads connecting towns and international borders.
- Kenya Urban Roads Authority: Receives a share to build and maintain paved routes, bypasses and arterial links within towns and cities.
- Kenya Rural Roads Authority: Allocates funds to maintain rural feeder roads that connect farms to markets across the counties.
- County Governments: Receive a direct conditional grant portion specifically earmarked for county-managed roads.
- Kenya Wildlife Service: Receives a smaller percentage to maintain roads inside national parks and game reserves.
A small fraction of the collected funds stays with the Kenya Roads Board itself to cover administrative expenses, auditing and technical oversight.
Why does the system matter to you?
For the ordinary motorist, commuter or business owner, the Road Maintenance Levy Fund directly influences the cost of moving goods and people.
When fuel prices rise due to a levy increase, logistics companies, matatu operators and food distributors pass those costs on to consumers. Everything from bus fares to the price of a cabbages at the market reflects that higher pump fee.
In theory, paying more at the pump should mean fewer potholes, lower vehicle repair costs and faster transit times. When the fund operates efficiently, smooth pavements reduce general wear and tear on cars and commercial trucks, offsetting the original tax paid at the pump.
However, if collected levies are delayed by bureaucratic bottlenecks, misallocated or lost to poor workmanship, transport businesses face a double penalty: higher fuel bills alongside broken axles, damaged tyres and delayed deliveries.
What comes next for the fund?
The sharp increase in the levy rate to KSh 25 per litre was introduced to bridge a growing deficit in national road maintenance budgets. Inflation, rising costs of bitumen and heavy rainfall damage have escalated the cost of fixing Kenyan roads over recent years.
The key issue for motorists and businesses remains accountability.
Public policy analysts and transport associations continue to monitor whether the increased levy will result in measurable improvements on urban and rural road networks. With the Kenya Roads Board managing higher annual revenues, the focus shifts squarely to execution: ensuring that every shilling taken from the pump translates directly into lasting pavement.