How the government lost KSh34bn in months on fuel subsidy- Report
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Government lost KSh34bn in 15 months on fuel subsidy according to a report by Auditor General Nancy Gathungu
Government lost KSh34bn in 15 months on fuel subsidy according to a report by Auditor General Nancy Gathungu.
The latest report by Auditor General Nancy Gathungu has unearthed an exposé carried out under former President Uhuru Kenyatta’s regime where Ksh34 billion vanished in 15 months leading to August 9, 2022, General Election as a result of the fuel subsidy programme.
The Sh34 billion, according to fiscal analysts at the Parliamentary Budget Office (PBO), is enough to construct 3,400 boreholes complete with all the fittings or build 6,800 fully equipped laboratories in secondary schools, or 17,000 classrooms.
The special audit presented to Parliament covered the period from April 1, 2021, to June 30, 2022.
Gathungu highlighted that the Ksh34 billion spent, which was intended to shield Kenyans from the high fuel prices, may have wound up in the hands of a select few.
Gathungu explained the statistics and said that 11 oil marketing companies received overpayments totaling Ksh554 million (OMCs).
Additional questionable transactions included the unauthorized use of Ksh22 billion from the Petroleum Development Levy Fund (PDLF) and Ksh5 billion in unauthorized advance sales pricing.
Administrative costs, according to the report, amounted to Ksh2.21 billion.
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The Treasury Cabinet Secretary at the time was accused of misappropriation over the PDLF whereby the funds were meant to be used in the development of facilities for either the distribution or testing of oil products.
According to the report, Ksh18.14 billion was transferred from the National Treasury to fund various road projects.
“Utilisation of the PDLF to fund road construction projects and transfers to the Ministry of Energy was in violation of the PDLF Act, the Petroleum Development Levy Order of 2020, and the PFM (Public Finance Management) Act,” the audit report stated.
In addition, the funds released for advance payments had no legal framework and hence lacked evidence of the recovery of the advance payment.
There is no documented compensation mechanism in place to ascertain the specific components of petroleum products that should be stabilized and the respective amounts to be paid to the OMCs,” read part of the report.
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