A report by the Office of the Auditor General has exposed avoidable blunders that made fuel expensive despite the government pumping Ksh139 billion in subsidies between June 2021 and June 2023.
In the report analysed by Kenyans.co.ke, the blunders highlighted were constraints of Kenya Pipelines Corporation (KPC) receiving facilities, scheduling insufficiencies of ships and change of vessel arrival dates by fuel importers.
According to the report, the 3 major blunders contributed to demurrage charges which were ultimately passed down to the consumers.
The auditor highlighted that some of the delays would extend to three days leading to more demurrage charges.
"A review of records confirmed that the vessels that docked at the port attracted demurrage charges amounting to ksh3,182,427,410, which were passed on to the customers through pump prices.
"The stabilization programme may have been hampered by avoidable additional costs which were passed on to the consumers and may not have cushioned the citizens from the high pump prices," read the report in part.
Further, the report also questioned advanced payments that were made to Oil Marketing Companies (OMCs) to the tune of Ksh5.3 billion.
It was noted that the money was aimed at compensating the companies for advanced hiked prices of fuel.
"There was no legal framework for advance payment and there was no evidence of recovery of this advance amount in subsequent payments to the oil marketing companies.
"Management explained the advance sales were compensated at the price differential between effective pump prices for the period and that of the preceding period for volumes sold between the 10th day of the previous pricing cycle and the 10th day of the next pricing cycle," the audit report noted in part.
The fuel subsidies programme was introduced by former President Uhuru Kenyatta in 2021 in a move aimed at cushioning Kenyans from high pump prices given that the economy had been affected by post-pandemic factors.
However, President William Ruto revoked the programme upon getting into office in September 2022, noting that the programme was only beneficial to the companies.
Notably, key financial players such as the International Monetary Fund (IMF) had also called on the government to cancel the programme as it was not beneficial to Kenyans.
Following the removal of the subsidies in September 2022, Super Petrol increased by Ksh20 to a record high of Ksh179.30 per litre.
Diesel was increased by Ksh25 while Kerosene increased by Ksh20.
