In response to growing public concern following a sharp increase in fuel prices, Roads and Transport Cabinet Secretary Davis Chirchir has defended the government’s move to securitize part of the Road Maintenance Levy Fund. The initiative, he explained, aims to clear Ksh.175 billion in pending payments owed to road contractors and revive over 580 stalled infrastructure projects nationwide.
From July 15 to August 14, fuel prices rose significantly, with super petrol up by Ksh.8.99, diesel by Ksh.8.67, and kerosene by Ksh.9.65 per litre. While this sparked public criticism, Chirchir clarified that the securitization process is not responsible for the price hike.
Under this financial arrangement, the Kenya Roads Board (KRB) sells rights to a portion of the levy—specifically Ksh.7 from the current Ksh.25 per litre—to a Special Purpose Vehicle (SPV). The SPV then raises capital upfront using these rights and channels the funds directly toward settling verified contractor claims.
“This is not the creation of new debt,” Chirchir emphasized. “It is a sale of rights to an existing levy to pay for pending bills—structured, legal, and transparent.”
The CS rejected claims by Kiharu MP Ndindi Nyoro that the deal was made in secret, reiterating that the process has been overseen by the National Treasury and the Attorney General. He also stressed that the securitization will not interfere with ongoing road maintenance or add to the national debt burden.
Energy Ministry officials, including Cabinet Secretary Opiyo Wandayi, attributed the recent spike in fuel prices to global market dynamics. According to S&P Global Platts data, international prices rose between 6.72% and 9.33% for petroleum products from May to June 2025. Wandayi dismissed suggestions linking domestic financial arrangements to the fuel price changes as misleading.
He further noted that the only domestic tax revision affecting fuel was last year’s parliamentary approval to increase the road maintenance levy from Ksh.18 to Ksh.25 per litre. Additional price increases resulted from adjustments to the Railway Development Levy and Import Declaration Fee, both tied to fluctuating import costs.
Meanwhile, Treasury Cabinet Secretary John Mbadi revealed that the government is considering securitizing an additional Ksh.5 from the Ksh.18 base levy, pending Parliament’s green light.
As the debate continues, the government maintains that securitization is a necessary, lawful mechanism to address legacy liabilities and accelerate infrastructure development without increasing the fiscal deficit.
