Gov’t Plans to increase Fuel Levy by 38%

In a hurry? Here’s a quick summary…

• The National Assembly Departmental Committee on Finance and National Planning is engaging with government agencies to discuss and refine proposals in the Finance Bill 2024, focusing on key issues like the Fuel Levy increase and the introduction of an Eco-Levy.
• Committee members have raised concerns about the effective use of allocated budgets and public trust, emphasizing the need for transparency and accountability in fund management as they work towards finalizing the bill.

The National Assembly Departmental Committee on Finance and National Planning has moved into a critical phase of deliberations on the Finance Bill 2024, engaging with various government agencies to discuss the bill’s proposals. 

Following the conclusion of its public participation phase, where the committee spent two weeks gathering concerns from stakeholders and the public, the focus has now shifted to in-depth discussions with government officials.

On Tuesday, the committee met with Cabinet Secretary for Roads and Transport, Kipchumba Murkomen, who supported the proposed increase in the Fuel Levy from Sh18 to Sh25 per litre. 

This 38% hike has sparked significant debate due to its potential impact on fuel costs. CS Murkomen argued that the additional revenue is necessary to address road maintenance backlogs and enhance the e-mobility infrastructure and road network quality. 

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However, committee members, led by Chair Kimani Kuria, expressed reservations about the effective use of the allocated budget, emphasizing public trust issues.

Further discussions involved Environment and Climate Change PS Festus Ng’eno, who defended the proposed Eco-Levy. 

This levy aims to tackle problematic waste streams by funding waste management systems, public education, and green technology development. PS Ng’eno cited successful examples from countries like Germany, Ireland, and Ghana to support the initiative. 

However, MPs David Mboni, Julius Rutto, and Joseph Munyoro raised concerns about ensuring the levy funds are used specifically for intended environmental projects. 

They stressed the need for clear mechanisms to ring-fence the funds and ensure timely disbursement to avoid project delays.

These discussions underscore the delicate balance the government must maintain between generating revenue for crucial initiatives and ensuring transparency and accountability in fund management. 

The committee’s findings and subsequent report will play a vital role in shaping the final version of the Finance Bill 2024. 

As the process moves forward, the government will need to address these concerns to gain public trust and ensure the proposed measures are in the country’s best interest. 

With public participation now concluded, the focus will be on refining the proposals and addressing the feedback received, striving to balance increased revenue needs with the demand for effective utilization of public funds.