Ruto team in fresh push to cut fuel prices, targets road levy

The government has unveiled a fresh legislative push aimed at easing the cost of fuel, with the National Treasury proposing a significant reduction in the road maintenance levy.

Under the proposed law, the Treasury seeks to cut the allocation from Sh3 to Sh1.50 per litre of fuel, a move that could translate into lower pump prices if Parliament approves the amendment.

The proposal is contained in the Road Maintenance Levy Fund (Amendment) Bill, 2026, which targets changes to Section 3(2) of the Road Maintenance Levy Fund Act (Cap 427).

“The section is amended in subsection (2) by deleting the words ‘three shillings’ and substituting therefor the words ‘one shilling and fifty cents’,” the Bill reads in part.

The amendment specifically focuses on the portion of the levy directed to the Road Annuity Fund, which finances road construction projects under the Road Annuity Programme and other initiatives approved by the National Assembly.

If enacted, the change would effectively reduce the levy component on every litre of petrol and diesel sold in the country by Sh1.50. This comes at a time when fuel prices remain elevated, with petrol retailing at Sh197.6 per litre in the latest pricing cycle.

Treasury sources argue that the reduction would provide direct relief to consumers at the pump without undermining the broader road maintenance framework, as only a specific allocation within the levy is being adjusted rather than the entire charge.

The cabinet secretary retains the authority under Section 3(1) of the Act to revise the overall levy through a Gazette notice, offering additional flexibility in managing fuel costs.

The proposed amendment is the latest in a series of interventions by President William Ruto’s administration aimed at cushioning Kenyans from the impact of rising global oil prices, which have exerted pressure on transport costs, food prices and overall household spending.

Just days before the introduction of the Bill, Parliament passed the Value Added Tax (Amendment) Bill, 2026, reducing VAT on petroleum products from 16 per cent to 8 per cent.

The tax cut, which has already been assented to by President Ruto, is a temporary measure set to run for 90 days, with the option of extension for a further three months depending on global market conditions.

The combined effect of the VAT reduction and the proposed levy cut could significantly lower fuel prices, although other statutory charges will remain in place.

In addition to tax measures, the government has also tapped into the Petroleum Development Levy (PDL) Fund to cushion consumers. A total of Sh6.2 billion has been released to stabilise pump prices amid global volatility.

Energy Cabinet Secretary Opiyo Wandayi said the intervention helped prevent sharper increases in fuel costs.

“You all saw that fuel prices went up, but don’t worry. Even though prices increased, the national government made strategic interventions. First, we introduced a Sh6.2 billion subsidy, prices would have escalated much further,” he said.

The administration has also continued to rely on the Government-to-Government (G-to-G) fuel import arrangement, which President Ruto has credited with ensuring a steady supply and competitive pricing despite disruptions in global oil markets, particularly in the Middle East.

Attention now shifts to Members of Parliament, who will be required to debate and approve the Road Maintenance Levy Fund amendment. With the VAT cut already in effect and subsidy measures in place, the proposed levy reduction represents the third major intervention within a short period.

The government has faced mounting criticism over the high cost of fuel, with the latest measures seen as part of a broader effort to deliver sustained price relief.

However, analysts note that the Cabinet Secretary’s powers to adjust the levy through Gazette orders mean the relief may not necessarily be permanent unless anchored firmly in law.

Even so, the bill offers renewed hope to consumers that fuel prices could ease further in the coming months, potentially lowering the cost of living across multiple sectors of the economy.