Court Confirms Fuel Tax Increase

The High Court of Kenya has dismissed a petition challenging the recent increase in the road maintenance levy on fuel. The court ruled that the government followed constitutional standards for public participation when implementing the increase in July 2024.

The decision upholds the Sh7 per litre increase, from Sh18 to Sh25, and rejects a move that would have created a significant shortfall in the national roads maintenance budget.

Legal Challenge and Initial Petition

Haki Yetu Organisation filed a petition against the Cabinet Secretary for Roads and Transport, the Kenya Roads Board, the Energy and Petroleum Regulatory Authority, and the Attorney-General. The petition sought to invalidate the Road Maintenance Levy Fund (Imposition of Levy) Order, 2024, suspend its enforcement, and mandate refunds to motorists. This would have involved a Sh7 reduction in fuel prices for the duration the levy was applied. Legal Notice No. 109, published on July 10, 2024, formalized the levy increase.

Petitioner’s Arguments

The petitioner argued that the increase lacked “adequate, effective, meaningful, proper, and tangible public participation.” They claimed the consultation process was inadequate, citing insufficient notice periods, limited and poorly distributed venues, and confusion caused by a retracted public notice on social media. The petitioner also asserted that Kenyans were not adequately informed about the rate, rationale, and impact of the increase, and that dissenting views were disregarded. They referenced a Cabinet Secretary’s earlier statement expressing concerns about the cost of living, arguing it contradicted the subsequent levy increase.

Kenya Roads Board’s Defense

The Kenya Roads Board defended the levy as a legally established road maintenance fund last reviewed in 2016. They presented a July 2024 study indicating that collections were insufficient due to inflation, rising construction costs, shilling depreciation, fuel import prices, road network expansion, climate-related damages, and maintenance backlogs. The study estimated an annual funding requirement of Sh157 billion against a Sh63 billion deficit, justifying the phased increase to Sh25 per litre. The board’s study projected a need for Sh34 per litre to fully bridge the funding gap.

Government’s Process

The respondents, including the Kenya Roads Board, stated they followed due process by publishing a draft order, soliciting written memoranda, conducting forums in 10 regions, performing a regulatory impact assessment, and submitting documents to the National Assembly. They maintained that the court should not override executive discretion on levy rates.

Court’s Reasoning on Public Participation

The court acknowledged that public participation is integral to a democratic state and plays a central role in policy formulation. However, it emphasized that courts evaluate reasonableness contextually. The court clarified that while participation must be substantive, it need not involve exclusive oral hearings, noting that written submissions are also valid.

Court’s Findings on Timing and Notice

The court found the timing and notice period for the levy increase to be sufficient. It considered the straightforward nature of the Sh7 increase and deemed a 10-day window for memoranda and 12 days before forums as reasonable. The court stated that the public notice clearly outlined the proposed increase and invited feedback.

Rejection of Petitioner’s Claims

The court dismissed claims of inaccessible venues or social media confusion, noting the petitioner failed to provide evidence from individuals who were unable to participate. It also rejected allegations that opposing views were ignored, describing them as “too generalised and lacking substantiation.” The court emphasized that the petitioner bore the burden of proof and failed to provide sufficient evidence to demonstrate flaws in the promulgation of the Levy Order.