Auditor General flags sh5.3B paid to oil companies, says there is no legal framework for such payments
Auditor General flags sh5.3B paid to oil companies: The Auditor general raised concerns over an advance payment of Sh5.32 billion to oil marketing firms for fuel price stabilisation, citing the lack of a legal framework for such payments.
According to the audit report, there is no evidence of recovery of this advance payment in subsequent payments made to the Oil Marketing Companies (OMCs), an issue that has sparked concerns about the transparency and accountability of these transactions.
Notably, The Auditor General stated that an amount of Sh2.2 billion was also paid as administration costs for the period ending June 30 2023, but there was no justification for including these stabilization administration costs in the pump price build-up.
The audit revealed that consumers incurred approved demurrage charges through pump price adjustments, caused by scheduling inefficiencies, ullage constraints at Kenya Pipeline Company facilities and changes in vessel arrival dates by importers, potentially failing to shield them from high fuel prices.
The Auditor general stated,”Review of records confirmed that the vessels that docked at the port attracted demurrage charges amounting to Sh3,182,427,410, which were passed on to the customers through pump prices.”
“The stabilisation programme may have been hampered by avoidable additional cost which were passed on to the consumers and may not have cushioned the citizens from the high pump prices,”she added.
This comes after the National Assembly demanded a scrutiny into the financial records for the State Department of Petroleum during the financial years 2020/21; 2021/22 and 2022/23.
The review revealed that an amount of Sh139.1 billion was incurred in the fuel subsidy programme.
Also read 4 arrested as NPS Recovers Money Stolen from a parked Car