President Uhuru Kenyatta has released billions of shillings owed to oil marketers following a public outcry over the ongoing fuel shortage.
Traders have been hoarding the product, some selling to cross-border subsidiaries, creating a shortage whereby a litre of petrol sold for as much as Sh200 in some parts of the country.
On Monday, Uhuru signed into law five bills, including the 2022 Supplementary Appropriation Bill worth Sh139.75 billion.
It allocates Sh34.4 billion to the oil subsidy kitty meant to cushion consumers from high fuel prices in the global market.
The government has been earning Sh5.4o per litre of diesel since July 2020, as a levy towards the Fuel Stabilisation Fund, netting close to Sh25 billion every month.
It is not clear why the exchequer did not release the cash to oil marketers to prevent the crisis.
In 2020, the Petroleum and Mining ministry reviewed the levy, increasing it to Sh5.40 per litre from 40 cents while expanding its mandate by including a price stabilising component for diesel.
On Saturday, the Energy and Petroleum Regulatory Authority said the government was yet to compensate marketers Sh13 billion.
Appearing on a TV news programme on Sunday, Petroleum PS Andrew Kamau acknowledged the delay, saying marketers will have their funds by Tuesday at the latest.
This is the second time the government has collided with oil suppliers over the subsidy kitty.
In September last year, the government was forced to stop the relief programme after marketers protested delayed refund.s
Malicious individuals are hoarding fuel causing suffering to Kenyans. This is a criminal act and the DCI should promptly act
This caused fuel prices to increase by Sh7.58 a litre in Nairobi to Sh134.72, while diesel jumped from Sh7.94 to Sh115.6 a litre — the highest in Kenya’s history.
The crisis caused the Parliamentary Energy Committee to summon National Treasury PS Julius Muia who said the kitty was partially used to settle due debt on the standard gauge railway.
The acute fuel shortage has caused a nationwide uproar.
National Assembly Speaker and presidential hopeful on Democratic Party ticket Justin Mururi called on the DCI to probe fuel marketers for creating an artificial shortage.
“It seems there are some malicious individuals in this country who are hoarding fuel causing suffering to Kenyans. This is a criminal act and the DCI should promptly act and bring these characters to book,” Muturi said.
He said Kenya Pipeline has a surplus.
Muturi spoke during Kikuyu gospel musician Mary Lincoln's 10-year musical career anniversary at Ruiru Stadium, Kiambu county.
Thousands of public transport vehicles were grounded, which means potentially millions of people were cut off from economic and other activity.
The few outlets that still have fuel began hiking prices illegally and some matatus doubled their fares.
A spot check in Nairobi, Mombasa, parts of the Rift Valley and Central Kenya showed public transport has been paralysed and no vehicles were ferrying passengers far away from towns.
In Nairobi, the few matatus travelling to Western Kenya hiked their prices.
At North Rift shuttles, Paul Kimani, a fleet manager, said every 14-seater vehicle has to be armed with a 20-litre jerrycan.
“They (drivers) do not know where they might find fuel. They also do not know if the fuel in their tanks will get them to their destinations,” Kimani said.
The fleet Kimani manages plies the Nairobi-Eldoret-Bungoma-Kitale-Kimilili and Malaba route. He said there is no fuel in Eldoret, Kitale, Bungoma and Malaba but Nairobi was far better off.
Guardian vehicles traffic manager Patrick Kibet said they might be forced to ground their long-distance vehicles. Guardian plies Nairobi and Western Kenya routes.
“If we do not get a constant supply of fuel, our work will be affected. We predict our work will stall,” Kibet said. He said they have not hiked fares.
Zeituni Ramadhan, an accountant with Mash East Africa, told the Star their cars have stalled.“Our courier vehicle has stalled for two days. We have to look for fuel and send it to them,” she said.
We are helpless because our investments are going to zero. There are no returns on investments
Ramadhan said they have not increased fares for the vehicles plying Nairobi to Kampala routes. She said they have increased fares by Sh100 for every passenger on other routes.
Matatu Owners Association chairman Simon Kimutai said they are not making any profit.
“We are helpless because our investments are going to zero. There are no returns on investments,” Kimutai told the Star from his home in Kericho county.
Kimutai warned the economy is set to suffer irreparable damage. “I really pity those who rely on transport to take food to supply points.”
The MoA boss said unscrupulous businessmen have also hiked the price of fuel.
Federation of Public Transport Sector chairman Edwin Mukabanah said some long-distance vehicles have been grounded as a result of uncertainty surrounding the availability of fuel.
“The long-distance drivers cannot take a risk when they know there is fuel shortage,” Mukabanah said.
He said about 30 per cent of their earnings have been lost by fuel disruption.
“The fuel shortage is affecting the number of trips we make in a day, which has affected our revenue. The drivers who depend on trips have also been affected as the high cost of fuel has eaten into the money they would have been given.”
In Mombasa, some fuel stations have been forced to close down completely due to the lack of petrol.
“There is no fuel in Mombasa. The little that is available is very expensive. We have been forced to move from one petrol station to another looking for fuel.
"I left my car by the roadside to look for fuel in a container,” Mombasa motorist Collins Janga said.
He said the transport sector has really been affected and income has fallen.
“Normally, in a day I used to make at least Sh3,000, but now things have changed and the business is affected due to lack of fuel," he said.
If you are lucky to get a petrol station with fuel, they will not give the exact amount you want. If you want a full tank they will give you a half tank.”
In Mombasa, the price of petrol is Sh132.40 per litre. Diesel costs Sh113 and kerosene Sh101, which is not available in most petrol stations.
Joram Ochieng, an attendant at a petrol station in Mombasa, said they have little fuel remaining that cannot last until the end of the day.
“The situation is hard. We have been forced to restrict vehicles from getting what they want.We are rationing the fuel so everybody can get it,” he said.
He said trucks and buses, which usually get at least 160 litres, are being given a maximum of 100 litres. Other drivers cannot get fuel worth more than Sh3,000.
In Kericho, angry motorists hit out at Kenya Pipeline Company, wrongly accusing it of paralysing transport activities by hoarding petrol. The issue is government not releasing billions of shillings in subsidies.
For the last three days, long queues of motorists were witnessed in Kericho town as motorists waited for their turn to fuel vehicles and motorbikes.
Some pump operators increased petrol prices from Sh130 per litre to Sh200.
Taxi operator Kipsalat Kemoi called for unconditional release of fuel to alleviate the agony of operators.
He said matatus operating between Kericho and Bomet were charging Sh600 instead of Sh300.
Passengers travelling from Kericho to Nairobi by Wish Toyota sedan cars have been forced to pay Sh1,300 instead of Sh800.
Local boda boda operators have also hiked fares. The operators were charging Sh60 instead of Sh30 between Kericho town and Nyagacho.
Attendant Peter Wanjala at a petrol station in Mombasa said they ran out of petrol on Saturday and by Monday morning, they were out of diesel.
“We do not know when we will get the fuel. Most petrol stations in Mombasa have been affected and some have closed down because they have nothing to sell," he said.
“In Kenya, we are used to getting commodities even when the prices are high. If there is fuel in the reserves, they should just sell it to Kenyans, even if it means a higher price,” he said.
(edited by Amol Awuor)
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