Fuel prices in Kenya could rise to highs witnessed last September September unless government releases subsidy funds to cushion oil marketers.
Yesterday, an official of the oil marketer’s body who is also a manager at a leading oil firm told the Star in confidence that marketers have not been paid for two months.
''Business is not making sense to us. It is high time the government relooks at the subsidy programme to check if it is sustainable. Enough of meaningless public relations,'' the seemingly angry official said.
He added that they might be forced to hold onto their stock if the situation does not improve.
''Oil marketers were paid Sh1.753 billion for two shipments in the November-December cycle while two others are pending. This is a drop in the ocean compared to Sh8.2 billion we are expected to get monthly,'' said the official.
In November, Oil Marketers Association of Kenya (Omak), marketers' lobby said the government was holding close to Sh15 billion of their money.
Yesterday, the Energy and Petroleum Regulatory Authority (Epra) declined to comment on the matter, saying its functions are limited to implementation.
The National Treasury had by last evening not responded to our inquiries on whether it had released the funds to the relevant authority and if not why had not been responded to by the time of going to press.
The subsidy scheme is supported by billions of shillings raised from fuel consumers through the Petroleum Development Levy, which was increased to Sh5.40 a litre in July 2020 from Sh0.40, representing a 1,250 per cent rise.
Last Friday, Epra retained pump prices for petroleum products despite a drop in the landed cost.
The landed cost of imported Super petrol decreased by 4.1 per cent from $627.80 (Sh71,206) per cubic metre in November to $601.97 (Sh68,276) in December.
A litre of petrol now retails at Sh129.72 in Nairobi, while diesel go for Sh110.60 per litre. Kerosene to continue retailing at Sh103.54 per litre.
The oil subsidy programme cuts Sh4.57 a litre on a litre of Super Petrol, diesel Sh7.90 and Kerosene Sh9.43.
This means the state compensates oil marketers at least Sh4.8 billion for diesel followed by Sh3 billion for super petrol at Sh3.03 billion and Sh0.3 billion for kerosene based on the average consumption of the three fuels.
In September last year, fuel prices rose to the highest level in Kenya’s history after the state discontinued a subsidy scheme introduced in April to ease public outrage over the high cost of living.
This increased the price of petrol by Sh7.58 a litre in Nairobi to Sh134.72 while diesel has jumped Sh7.94 to Sh115.6 a litre — the highest in Kenya’s history.
On Thursday, Garissa Town Member of Parliament Aden Duale petitioned the Speaker of National Assembly Justin Muturi to recall the Parliament which is currently on recess to discuss the Petroleum Products (Taxes and Levies) (Amendment) Bill, 2021.
Duale said the matter was really urgent considering the high fuel prices that are impacting negatively on the cost of living in the country.
''Honorable Speaker, as you are aware, the Bill seeks to among other things review taxes and levies on the petroleum products which account for over 50 per cent of fuel bill, increasing the cost of living,'' Duale said in the letter seen by the Star.
The proposed law is sponsored by the chairperson, Departmental Committee on Finance and National Planning, Gladys Wanga and was published last year on October 28.
