Economy

Treasury officials face sanctions over fuel subsidy cash

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Treasury Principal Secretary Julius Muia. FILE PHOTO | NMG

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Summary

  • Senior officials at the Treasury and Ministry of Petroleum risk sanctions for diverting Sh23.6 billion meant for the fuel subsidy, a move that led to the discontinuation of the scheme last month and pushed pump prices to record highs.
  • National Assembly Speaker Justin Muturi said Tuesday MPs would decide on the fate of the officials when they debate committee recommendations on the review of the pricing of petroleum products.

Senior officials at the Treasury and Ministry of Petroleum risk sanctions for diverting Sh23.6 billion meant for the fuel subsidy, a move that led to the discontinuation of the scheme last month and pushed pump prices to record highs.

National Assembly Speaker Justin Muturi said Tuesday MPs would decide on the fate of the officials when they debate committee recommendations on the review of the pricing of petroleum products.

The State discontinued the fuel subsidy that had kept pump prices unchanged since April due to a lack of cash in the kitty, a decision that saw petrol and diesel prices jump to a historic high of Sh134.72 and Sh7.94 to Sh115.6 a litre respectively.

“You cannot provide that on one hand, you will collect this levy for this purpose, then somehow you put your fingers, remove money and where it was spent, nobody seems to know,” Speaker Muturi said  on Tuesday.

“I like what the committee has done so that as a house you can make a determination on what to do with those fingers if you will cut them off.”

The Committee on Finance will table its report before Parliament next week, setting the stage for debate on the sanctions against the top officials.

Treasury PS Julius Muia told MPs that it received a request of Sh5 billion to stabilise pump prices a month to October 14 but could not honour it due to the lack of funds.

Oil dealers received Sh8.64 billion from the State in compensation for the five months that fuel prices remained unchanged

Motorists have been contributing Sh5.40 per litre to the subsidy scheme since July last year after the Petroleum Development Levy was increased from Sh0.40.

Mr Muia added that the kitty had a balance of Sh3.6 billion, raising questions on the expenditure of the billions of shillings collected through the levy since July last year

The Treasury administers the Petroleum Development Levy on behalf of the Ministry of Petroleum and Mining.