Parliament’s Finance Committee has directed the Treasury to refund Ksh18.1 billion that it diverted to a Chinese Farm which was for the fuel subsidy.
According to the report by parliament, the funds were diverted to the Chinese Firm operating the Standard Gauge Railway (SGR).
Kenya owed Africa Star Railway Operation Company Ltd (Afristar), the Chinese company contracted to operate the SGR train Ksh38 billion as at August 2020 and the bills have been increasing, prompting the Treasury to divert cash meant for the fuel subsidy scheme.
The Treasury released Ksh2.2 billion to the Ministry of Energy, Ksh1.6 billion to the Ministry of Petroleum and the balance ofKsSh18.1 billion was disbursed to the Transport and Infrastructure ministry to defray the SGR costs following request.
The Treasury collected Ksh31 billion in petroleum levy from July last year out of which Ksh8.6 billion was allocated to the fuel subsidy.
This was supposed to cushion motorists from the high prices, which they only enjoyed from July last year to July 2021, where by then Ksh8.6 billion had been used, when the remaining funds were diverted to other uses.
The subsidy scheme was depleted in August leading to a monstrous hike in fuel prices.
Parliament now wants the Treasury to refund Ksh18 billion it diverted from fuel subsidy.
The Finance Committee argued that the Treasury contravened the Petroleum Development Levy Fund by allowing such payments contrary to provisions of the law.
The law requires that the Treasury cushion Kenyans from high fuel prices and support infrastructure upgrades in the energy and petroleum sectors.
“The National Treasury should immediately upon adoption of this report start the process of reverting the Sh18.1 billion that was misapplied back to the Petroleum Development Levy Fund for purposes of stabilization of fuel prices,” the committee recommended .
The committee that had been formed following the hiking of fuel prices now wants the treasury to return the money to enable reinstatement of the subsidy scheme which had saved motorists Ksh24.44 per litre of diesel ,Ksh15.11 per litre of petrol and Ksh30.90 per litre of kerosene in the months it has been in place.
“The National Treasury should immediately upon adoption of this report start the process of reverting the Ksh18.1 billion that was misapplied back to the Petroleum Development Levy Fund for purposes of stabilization of fuel prices,” read a report by the National Assembly’s Finance Committee.
Fuel prices currently stand at Ksh134.72 per litre of Petrol, Ksh115.60 per litre of diesel, while kerosene sells at Ksh110.82 in Nairobi.