The government used Ksh58 billion from the Railway Development Levy Fund (RDLF) to settle arrears due to oil marketing companies. According to a new report from the auditor general, the government used money set aside for the development and maintenance of the standard gauge railway to pay oil markets in the financial year ending June 2024. The auditor general has revealed that the RDLF, which is domiciled within the Ministry of Transport, lent the State Department for Petroleum Ksh58 billion to settle debt owed to oil marketers. An act that, as Auditor General Nancy Gathungu noted in the National Government Funds 2023-2024 report, is against the Petroleum Development Fund Act of 1991. National Youth Service graduates riding the Madaraka Express Passenger Service train from Suswa station in Narok County to Mombasa, September 4, 2024.
Photo Kenya Railways "The report notes an irregular borrowing of Ksh58,279,451,755 from the Railway Development Levy Fund (RDLF) and State Department for Petroleum to settle arrears due to oil marketing companies, which is contrary to the Petroleum Development Fund Act, 1991," Gathungu said. The Railway Development Levy Fund (RDLF) is a funding mechanism established to support the development and maintenance of the railway infrastructure, particularly the SGR. The main source of revenue for the RDF is the Railway Development Levy (RDL), a tax of 2 per cent imposed on imported goods.
Conversely, the Petroleum Development Fund (PDF), established under the Petroleum Development Fund Act of 1991, was created to support the development of common facilities for the distribution or testing of oil products and matters related to the improvement of the oil industry.
The PDF is funded through the Petroleum Development Levy, which is imposed on petroleum fuel.
