The Ministry of Transport and Roads has dismissed claims that the government secretly introduced an additional fuel levy to secure a Ksh175 billion loan.
In a statement issued on Tuesday, the ministry clarified that the Kenya Kwanza administration inherited a backlog of unpaid bills in the roads sector totaling Ksh175 billion. These debts, it said, stemmed from unfulfilled commitments by the previous administration and had led to the suspension of more than 580 road projects across the country.
To address this backlog, the Kenya Roads Board (KRB) opted to securitise a portion of the Road Maintenance Levy. Under this arrangement, KRB sold rights to a Special Purpose Vehicle (SPV), allowing it to receive Ksh7 from the current Ksh25 per litre fuel levy. The remaining Ksh18 continues to go to KRB.
According to the ministry, this securitisation enabled the SPV—an independent entity—to raise funds upfront, which are then used to pay verified pending bills and revive stalled roadworks.
This explanation directly contradicts remarks made by Kiharu MP Ndindi Nyoro, who alleged that the government had quietly imposed an additional Ksh7 fuel levy at a time when global oil prices were falling. Nyoro claimed the levy was used as collateral to secure a Ksh175 billion loan.
“We saw fuel prices go up drastically yesterday, and the explanation given by the government is not accurate. Blaming global oil prices falls short of the reality. Over the past year, the highest fuel prices we have seen were actually on June 17, 2024,” Nyoro stated.
He further alleged that the Ksh175 billion loan was not listed in the government’s books, arguing it constituted illegal borrowing. “It can only pass as an illegal debt because whatever is not accounted for is illegal,” he added.
In response, the Ministry of Transport maintained that the securitisation process was conducted transparently, with all statutory requirements fulfilled. The deal, it said, was approved and overseen by the National Treasury and the Attorney General’s office to ensure compliance with Kenya’s financial laws.
The ministry also explained that before settling on securitisation, the government had explored various financing options. It concluded that this method was the most viable and legally sound way to unlock funds without adding new debt to the exchequer.
