Fuel Subsidy Scheme: The National Treasury under cabinet secretary Ukur Yatani diverted Sh. 18.1 billion fuel subsidy funds that were meant to cushion motorists from high fuel prices to the Chinese firm running SGR. This has been revealed by the  National Assembly’s Finance Committee.
The committee has instructed the National Treasury to use the Sh. 18.1 billion to reinstate fuel subsidy that was introduced in April and discontinued last month. The discontinuation saw fuel prices in Kenya rocket to the highest levels in history.
The subsidy fund was established in July 2020. It has been funded through the collection of Sh. 5.40 per litre. It was however depleted in August after the National Treasury used Sh. 3.8 billion to upgrade infrastructure in the energy sector and Sh. 18.1 billion to support SGR operations.
After this diversion, the National Treasury through the Kenya Revenue Authority had planned to raise fuel prices even higher from October 1 through the increase of excise duty rates for fuel by 4.97 per cent. This bid was however stopped by the High Court.
A report notes that the National Treasury collected Sh. 31 billion in petroleum levy from July last year out of which Sh. 8.6 billion went to fuel subsidy. “It released Sh. 2.2 billion to the Ministry of Energy, Sh. 1.6 billion to the Ministry of Petroleum and the balance of Sh. 18.1 billion was disbursed to the Transport and Infrastructure ministry to defray the SGR costs following request,” the report said.
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In some parts of Kenya in Northern region, consumers are buying a litre of petrol for as high as nearly Sh. 150. In Nairobi, the price of petrol will is selling at Sh. 134.2 per litre. A litre of diesel is selling at Sh. 115.60 while a litre of kerosene is now selling at Sh. 110.82 per litre.