Parliament opens probe into fuel levy collections


Parliament has opened an inquiry into the total amount of money collected under the Fuel Levy Fund from September 2021, even as MPs suspended normal business to discuss the nationwide fuel shortage.

The Petroleum and Mining Cabinet secretary will be required to provide a detailed breakdown of reimbursement of fuel levy fund per month from September 2021 to date.

The ministry will also provide reimbursements due to be paid to oil marketing companies (OMCs), petroleum dealers and small oil dealers.

Garissa Township MP Aden Duale has demanded that the Energy Committee compels the Cabinet secretary to provide the total number of registered OMCs, petroleum dealers and small oil dealers, their network distribution across the country and percentage shares of the market across the country.

He also wants measures that the ministry has put in place to curb the biting fuel shortage in future.

The government is running a fuel subsidy scheme, which is supported by billions of shillings raised from fuel consumers through the Petroleum Development Levy, which was increased to Sh5.40 a litre in July 2020 from Sh0.40, a 1,250 percent rise.

The fund cushions consumers from volatility in fuel prices but has also seen motorists lose out when paying the Sh5.40 for a litre at the pump.

The government says it owes the companies Sh13 billion while dealers claim to be owed in excess of Sh20 billion.

The standoff between the government and OMCs has plunged the country into a nationwide fuel shortage.

The National Assembly and the Senate have accused the government of creating the biting fuel shortage by failing to pay a multi-billion shillings subsidy owed to oil marketers.

The adjournment of business in both Houses of Parliament come a day after the Petroleum ministry released Sh8.2 billion subsidy arrears to petrol retailers to forestall a crisis.

The State has accused fuel marketers of hoarding petrol and diesel and has promised to fine those involved.

Petroleum Principal Secretary Andrew Kamau said on Monday that investigations into the shortage were being finalised, setting the stage for financial penalties and licence withdrawals.

He added that the supply hitches are expected to ease from Thursday after oil marketers steeped supplies to stations from depots.

Duale and Muranga Senator Irungu Kang’ata initiated the debate on the nationwide fuel shortage.

Mr Duale said the cashflow to oil marketers is affected by delays by the Treasury to reimburse them under the subsidy programme thereby leading to hoarding the little fuel they hold in their reserves.

“On March 14, 2022, the Energy and Petroleum Regulatory Authority (Epra) increased the pump prices of petrol and diesel by Sh5 but despite that, the government maintained the margins of oil companies at zero meaning no profits for the companies,” Mr Duale said.

In March, the energy regulator increased diesel and petrol to Sh115.60 and Sh134.72 respectively — the highest level in Kenya’s history — in its monthly review.

Mr Duale said a litre of petrol went up to Sh147.75 in Mandera, Sh144.15 in Moyale town, Sh145.34 in Elwak town, Sh143.19 in Kibish town and Sh134.72 in Nairobi.

“Where did the subsidy money go. Why were oil dealers not paid the subsidy arrears? Why go to a Supplementary Budget to generate the money when we collect petroleum development levy from motorists?” Bungoma Senator Moses Wetangula asked.

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