Motorists paid Sh15.63 billion to stabilise pump prices in the first eight months of the current financial year to February 2023, documents from the Ministry of Energy show, amid struggles by the State to clear billions of shillings owed to oil marketers.
The Treasury has so far spent Sh8.7 billion of the money to compensate oil dealers for keeping pump prices low in the period and is yet to pay an estimated Sh50 billion to dealers.
Motorists pay Sh5.40 per litre each for diesel and petrol for the levy that was increased from Sh0.40 in July 2020, reflecting a 1,250 percent jump.
The Ministry of Energy spent Sh4.04 billion on undisclosed projects, leaving a balance of Sh6.43 billion as of Monday.
Kenya started stabilising fuel prices in the monthly review that ended on April 14th 2021, but the subsidy scheme has faced cash-flow hitches attributed to illegal diversions of cash meant to compensate oil companies.
A global rally in crude prices last year increased compensation margins per litre of super, diesel and kerosene prompting the Treasury to review spending and free up additional funds to boost the PDL.
The scheme was rolled out two years ago in the wake of a global rally in crude prices that sent local pump prices to record highs, prompting the intervention in a bid to prevent a spike in the cost of living.
Oil marketers say they have not been paid for six monthly cycles highlighting the struggles by the Treasury amid debt servicing obligations that have choked other budget items.
The Treasury is seeking an extra Sh42.7 billion in the supplementary budget for the year ending June in a bid to provide enough cash to clear the billions owed to oil dealers.
