The government, through the Ministry of Transport and Roads, has come out to clear the air on allegations of using the fuel levy to secure a Ksh175 billion loan.

Through a statement by Cabinet Secretary Davis Chirchir, the ministry revealed that upon assumption into office, the Kenya Kwanza administration inherited a substantial backlog of pending bills in the roads sector, amounting to Ksh175 billion.

The bills had risen from commitments made by the previous administration, yet had remained unpaid, leading to the suspension of over 580 road projects across the country.

As such, to address the pending bills, the Kenya Roads Board (KRB) securitised the fuel levy to clear the bills and revive the stalled projects.

The 2.4KM Kaptimbor–Airstrip Road in Kabarnet, Baringo County, July 9, 2025.

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KURA

In this context, through securitisation, KRB sold the rights to a Special Purpose Vehicle (SPV) to receive a portion of the future Road Maintenance Levy, specifically Ksh7 from the current Ksh25 per litre levy. This meant that Ksh18 would go to KRB while Ksh7 would be used as security.

In this way, the SPV, which is operating as an independent entity, raises funds upfront based on these rights and uses the funds to clear the verified pending bills. 

The Ministry’s response is contrary to Kiharu Member of Parliament (MP) Ndindi Nyoro’s allegations, where he had claimed that the government quietly introduced an additional Ksh7 fuel levy during a period when global oil prices were dipping.

According to Nyoro, this was more than a revenue-raising measure, as the levy was allegedly used as collateral to secure the Ksh175 billion as a loan.

He was speaking after a sharp rise in fuel prices in the latest fuel review by the Energy and Petroleum Regulatory Authority (EPRA). The Ministry of Energy had attributed the surge to international market fluctuations, but Nyoro had claimed that the government was involved in “secret borrowing.”

“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 claimed that the Ksh175 billion was not reflected in the government's books as debt. “It can only pass as an illegal debt because whatever is not accounted for is illegal,” he noted.

However, the ministry assured that the decision to securitize was made with utmost transparency, legality and accountability. 

“All statutory requirements were fulfilled, and the process underwent due diligence, approvals, and oversight by the National Treasury and the Attorney General’s office to ensure compliance with Kenya’s financial laws,” noted the ministry.

Further, it explained that before deciding on securitization, the government had considered several financing options to address the payment of the pending bills. 

As per the ministry, securitisation was the most viable and legally sound mechanism to unlock funds in a manner that does not burden the exchequer with additional debt. 

A man fueling a car at a petrol station

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New Vision