Kenyan taxpayers to lose Ksh3.2 billion after govt cancelled controversial fuel import deal
Kenyans are set to bear a financial burden of up to Ksh3.2 billion following the cancellation of a controversial fuel import deal involving an oil tanker
Kenyans are set to bear a financial burden of up to Ksh3.2 billion following the cancellation of a controversial fuel import deal involving an oil tanker that had already been procured for delivery to the country.
The loss stems from the abrupt reversal of a procurement agreement that had been awarded to a shipping company before the vessel docked at the Port of Mombasa, raising questions over due process and accountability in the energy sector.
A Senate Committee on Energy has since launched investigations into the circumstances surrounding the cancellation, as well as claims of irregular fuel procurement outside the G-to-G framework.
The tanker, reportedly carrying 96 tonnes of fuel, had been scheduled to arrive in Kenya before the deal was called off, triggering a compensation claim against the government by the affected oil importer.
Appearing before the committee, company manager Angeline Maangi revealed that the firm entered into the agreement following instructions from the Ministry of Energy, and is now seeking to recover losses amounting to Ksh3.2 billion.
“The damages we incurred are upwards of 25 million dollars, that is Ksh3.2 billion, in the form of demurrage, premiums, and other related costs. Our pricing simply reflected the global market at the time, where supply disruptions forced us to compete with Asian buyers at any cost,” Maangi noted.
In response, the government has initiated recovery proceedings targeting importers linked to the disputed transaction, in a move aimed at safeguarding public funds from further losses.
The scandal reportedly involved the importation of fuel at inflated prices ranging between Ksh50 and Ksh80 per litre, significantly higher than rates under the G-to-G pricing arrangement.
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Meanwhile, the Ethics and Anti-Corruption Commission (EACC) has indicated that it has not yet commenced investigations into the matter, noting that the allegations currently fall under criminal jurisdiction.
EACC Chairperson Abdi Mohamud, on Tuesday, while speaking during an anti-corruption workshop with the media, stated that the Directorate of Criminal Investigations (DCI) is already handling the case, adding that the commission will only step in if necessary to avoid overlapping mandates.
“That matter is being handled by DCI. In order to avoid parallel investigations, we are not going to commence any investigations. Once DCI starts, we leave it to them to conclude on that and later see if they conclude and we have something on that,” Mohamud said.
This comes at a time when Kenyans are bracing for increased pain at the pump following a sharp fuel price review by the Energy and Petroleum Regulatory Authority (EPRA), with prices now crossing the Ksh200 mark.
In its latest review released on Tuesday, April 14, EPRA announced significant increases in the maximum pump prices, with Super Petrol rising by Ksh28.69 per litre and Diesel by Ksh40.30 per litre, while Kerosene prices remain unchanged.
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