The Public Investments Committee on Commercial Affairs and Energy has declared the National Oil Corporation technically insolvent and questioned its deal with a private fuel station chain in Kenya.
A session scheduled by the committee with NOCK officials on Thursday was also suspended, with the MPs citing grave concerns over the financial mismanagement and rising debt.
Led by Pokot South MP David Pkosing, the committee also flagged a troubling lack of transparency in the state organisation's partnerships.
“The National Oil Corporation is no longer a going concern. We are staring at a dead agency that can neither meet salaries nor sustain operations,” MP Pkosing declared.
As a result, the committee now wants the Auditor-General to conduct a special audit into the Corporation’s dealings, particularly the circumstances under which a private energy company was brought in as a strategic partner.
This special audit will assess the financial and legal implications of the partnership, including whether the capital injected by the private company constitutes a loan and whether it was guaranteed by the National Treasury.
“We must interrogate whether bringing in the private energy company without equity participation was the best solution, or just another short-term fix that exposes the Corporation and taxpayers to greater risk,” Pkosing emphasised.
The Auditor-General has until August 14, 2025, to conduct this special audit and present the report to Parliament.
In the meantime, the committee has directed NOCK to suspend execution of its agreement with the fuel company for one month, pending the outcome of the special audit.
NOCK had reportedly leased its retail infrastructure to third-party retailers, raising questions about the implications of the agreement with the private company, especially if the Corporation seeks to resume full downstream operations.
In addition to this questionable deal, the committee found that NOCK's debt owed to creditors has reached a staggering Ksh7.4 billion, with two Kenyan commercial banks claiming Ksh3.4 billion and Ksh2.9 billion, respectively.
As a result, the agency is unable to meet its recurrent expenditures, including staff salaries and maintenance of its fuel stations, raising serious concerns about its sustainability.
