Economy

Munyes snubs summons over Sh5.40 petrol levy

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Petroleum Cabinet Secretary (CS) John Munyes. FILE PHOTO | NMG

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Summary

  • Senate Committee on Energy chairperson Ephraim Maina accused Mr Munyes of snubbing invitations to deliberated on the Petroleum Development Levy Fund which took effect on July 15.
  • The Petroleum Development Levy was increased from Sh0.40, representing a 1,250 percent rise, and will be used to subsidise fuel prices when they rise by large margins.
  • Parliament must ratify the increase and the new fund, which the CS will use to determine the amount of subsidy consumers will enjoy.

Petroleum Cabinet Secretary (CS) John Munyes snubbed Parliamentary summons to shed light on his decision to increase petrol levy more than 10 times to Sh5.40 per litre of fuel

Senate Committee on Energy chairperson Ephraim Maina accused Mr Munyes of snubbing invitations to deliberated on the Petroleum Development Levy Fund which took effect on July 15.

The Petroleum Development Levy was increased from Sh0.40, representing a 1,250 percent rise, and will be used to subsidise fuel prices when they rise by large margins.

Parliament must ratify the increase and the new fund, which the CS will use to determine the amount of subsidy consumers will enjoy.

The fund is meant to cushion consumers from volatility in fuel prices, but it will also see motorists lose out when paying the Sh5.40 for a litre at the pump.

"This is the fourth time that the Cabinet Secretary has failed to appear before us in this meeting and he thinks he is not answerable to anybody,” Mr Maina said.

The committee warned Mr Munyes that he risks arrest if he fails to honour the last invite.

“He is now a free man, he is in government, he can decide whether to answer to our meeting or not. We have all the options to compel him to appear before us,” Mr Maina said during a meeting called between MPs, Kenya Power and the Energy and Petroleum Regulatory Authority ((EPRA).

EPRA acting director-general Mueni Mutunga and her Petroleum and Gas directorate counterpart Edward Kinyua who appeared in a virtual meting told MPs they did not know of Mr Munyes whereabouts.

Prof Imana Malachy, the Turkana senator claimed that Mr Munyes, who is his constituent, has been busy campaigning to succeed Josphat Nanok, as the governor of Turkana.

The levy is expected to raise nearly Sh30 billion annually, up from the Sh2.28 billion last year.

The Kenya Revenue Authority will be the custodians of the billions raised through the levy.

EPRA has since 2010 been setting maximum fuel prices, which are determined every 15th day of the month and remain in force until the 14th day of the following month.

Now, the CS in charge of petrol will have a role in approving cuts triggered by the subsidy.

The ministry reckons that the fund — which is modelled as a hedging tool — would ensure local firms and motorists do not suffer steep price increases caused by global market changes.

Critics have, however, argued that hedging is unnecessary, saying that the country should instead invest in larger storage facilities to allow importation of large cargo in times of lower prices and enjoy price stability.