How Debt Is Preventing Govt From Reducing Fuel Prices - CS Mbadi

Hello and welcome to the Money News Roundup Newsletter, where we break down CS John Mbadi’s explanation of why the government cannot reduce the fuel levy, alongside the latest developments surrounding the Adani Group case in the US.

How Debt Is Preventing Govt From Reducing Fuel Prices - CS Mbadi

Treasury CS John Mbadi has stated that the government cannot reduce the Road Maintenance Levy given that part of the funds have been securitised to fund road projects in the country.

The CS, who was speaking on NTV on Monday, May 18, was responding to calls for the government to cut the levy by Ksh7 per litre.

The government currently collects Ksh25 per litre towards the levy, which funds road maintenance.

The government in the April review lowered the VAT rate on petroleum products from 16% to 8% as a means to cushion Kenyans from high pump prices.

Despite the reduction of VAT and the application of a Ksh5 billion subsidy, fuel prices rose, with diesel prices now retailing at Ksh242.92 per litre in Nairobi after a Ksh46.29 hike announced in the latest review by EPRA.

Meanwhile, commuters were left stranded on Monday morning at various matatu stages across the country following the nationwide strike by public transport operators.

As reported by Citizen Digital, Nation, Standard and other outlets,  many Kenyans were forced to seek alternative means of transport to work, with some opting for boda bodas and ride-hailing services, while others returned home after failing to secure transport.

Matatu operators, who largely rely on diesel-powered vehicles, said the increase had significantly raised operational costs, making it difficult to sustain normal services. Meanwhile, matatu fares have increased by up to 50% across the country.

Also Read: All You Need to Know About the Sanlam Allianz Balanced Fund With a 32.3% Return

Adani Settles US Case as Kenya Awaits Ksh96 Billion Deal Compensation Talks

Indian billionaire Gautam Adani has settled a civil fraud case with the US Securities and Exchange Commission (SEC) as Kenya continues to await talks over compensation following the cancellation of a Ksh96 billion power transmission deal.

As reported by the Business Daily, Adani and his nephew, Sagar Adani, paid Ksh2.3 billion (USD18 million) in a settlement without admitting or denying allegations linked to a Ksh34 billion (USD265 million) bribery scheme.

 The US indictment had prompted President William Ruto to cancel the 30-year public-private partnership deal in November 2024.

Hustler Fund Gets Zero Allocation in This Year’s Budget

Kenya Kwanza’s flagship Hustler Fund is set to lose direct taxpayer funding after the National Treasury allocated zero shillings to the programme in the next financial year.

As reported by the Nation, the fund was launched in 2022 as a key pillar of the Kenya Kwanza bottom-up economic model; it aimed to provide affordable credit to small traders, boda boda riders and informal workers. 

The government initially allocated Ksh20 billion to the programme before gradually reducing funding to Ksh300 million in the current financial year.

Treasury officials say the fund was designed as a revolving facility sustained through loan repayments rather than continuous government injections.

By March 2026, the fund had disbursed Ksh83 billion in loans, with Ksh71 billion repaid. However, concerns over defaults and governance weaknesses have emerged.

Meanwhile, the government is shifting focus to the World Bank-backed NYOTA programme, which prioritises jobs, enterprise support and skills development for youth.

DTB Posts Record Quarterly Profit of Ksh3.48 Billion

Diamond Trust Bank Kenya recorded its highest-ever quarterly profit in the three months ending March 2026, with profit before tax rising 18.6% to Ksh4.81 billion.

As reported by the Kenyan Wall Street, profit after tax grew 7.7% to Ksh3.48 billion after the bank set aside a record Ksh2.23 billion for loan loss provisions. Gross non-performing loans rose to Ksh40.80 billion.

The growth was driven by a 30.9% jump in net interest income to Ksh10.02 billion as lower funding costs boosted earnings. Interest expenses fell 12.2% to Ksh6.14 billion, while customer deposits increased slightly to Ksh511.93 billion.

The lender’s quarterly earnings per share hit a record Ksh11.39, reflecting strong long-term growth over the past two decades.

Ethiopia, Dangote Launch Ksh516 Billion Fertiliser Plant Project in Gode

Ethiopia is partnering with Aliko Dangote on a major fertiliser plant in Gode aimed at boosting agricultural production and reducing reliance on imports.

According to Business Insider, the project, being developed by the Dangote Group, will produce three million metric tonnes of urea annually and is considered one of Ethiopia’s largest industrial agricultural investments.

Prime Minister Abiy Ahmed recently toured the project site alongside Dangote, saying construction was progressing steadily across multiple sections.

The total investment has risen from Ksh322 billion ($2.5 billion) to more than Ksh516 billion ($4 billion) following expansion plans that include a 110-kilometre pipeline, a 120-megawatt power plant, an NPK blending plant and packaging facilities.

Safaricom Licence Costs Rise to Ksh16.38 Billion After Securing 25-Year Approval

Safaricom Plc increased spending on licence fees by Ksh1.7 billion in the financial year ending March 2026 after securing a 25-year operating licence extension from the Communications Authority of Kenya (CA).

As reported by the Business Daily, the telecom giant disclosed that direct licence costs rose to Ksh16.38 billion from Ksh14.66 billion previously.

The long-term approval was issued under the CA’s Unified Licensing Framework and replaces a temporary two-year licence granted in 2024. Safaricom said the extension provides long-term certainty and strengthens its ability to invest confidently in future operations.

Vivo Energy Unveils Modern Shell Service Station in Nairobi

Vivo Energy Kenya has unveiled the new Shell Dennis Pritt service station in Nairobi’s Kilimani area as part of its strategy to transform fuel stations into modern retail and convenience hubs.

As reported by Capital Business, the station offers fuels, lubricants and Afrigas LPG products alongside non-fuel services including an ArtCaffe Market convenience store, restaurant, pharmacy, car wash and lubricant service bay.

Speaking during the launch, Vivo Energy Group CEO Stan Mittelman said the company continues to invest in modern service stations designed to improve customer experience and provide a one-stop shop for motorists.

The company operates more than 340 Shell stations in Kenya and currently holds a 20% market share in the fuel sector.