- Allocations to State Department for Petroleum has been reduced by Sh62.5 billion (94 per cent reduction).
- The reduction in recurrent expenditure stems from the decrease in funding for the fuel stabilisation programme.
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Revenue collections from Petroleum Development Levy are projected to drop by 87 per cent in the next financial year, a report by a parliamentary committee says.
The report by Departmental Committee on Energy on Budget Estimates for State Department for Petroleum for 2023/2024 Financial Year said collections will drop from Sh33.4 billion to Sh4.3 billion during the fiscal period.
The report said the department has been allocated Sh3.6 billion in the FY 2023/24 Budget which comprised Sh343 million for recurrent and Sh3.3 billion for development expenditure.
Compared to the approved estimates for 2022/2023, the proposed budget has reduced by Sh62.5 billion (94 per cent reduction).
The recurrent expenditure has seen a decrease of Sh63.3 billion (99 per cent reduction) while the development expenditure witnessed an increase of Sh820 million (33 per cent increase).
“The reduction in recurrent expenditure stems from the decrease in funding for the fuel stabilisation programme,” the report said.
It added that the majority of projects implemented by the department are faced with slow execution with most having a completion rate of below 50 per cent with the exception of the oil exploration and monitoring project which has a completion rate of 51 per cent as of March 31, 2023.
It further said there has been a delay in commencing implementation of clean cooking gas for public institutions project that emanated from a presidential directive of provision of clean cooking gas to 5,000 boarding institutions in the next 4-5 years.
The funding for the project is obtained from the Anti-Adulteration Levy which is collected at Shs.18 per litre of kerosene and amounts to Sh2.5 billion per annum.
The report said the National Treasury has not actualised the conversion of the levy to an Appropriation in Aid (AIA) for the department to use for the project.
It added that 30 per cent fuel importation and distribution share of the National Oil Corporation of Kenya( NOCK) has been impaired by its inability to access credit for its operations.
The report said the inability to access credit has seen corporation’s pending bills grow to Sh1.4 billion.