MPs mull revoking petroleum development fund citing opaque operations

NAIROBI, Kenya, Sep 29 – Members of Parliament are mooting revoking of the petroleum development fund citing lack of accountability in the implementation of the levy fund.

The National Assembly Finance committee led by Homa Bay Woman Representative Gladys Wanga raised concerns that the taxpayers have been contributing to the fund on an illegal basis.

Principal Secretary for Petroleum and Mining Andrew Kamau, while presenting his submissions to the committee, said a legal framework to guide the management of the fund had not been put in place since the petroleum levy was actualized.

“The petroleum development levy has been there since 1991, the tax payers has been contributing to it since 1998.It will be erroneous to term it as a fund since it has no board of directors due to lack of legal framework,” said Kamau during a session with the committee on Wednesday.

During the sitting, lawmakers questioned why the taxpayers have been contributing to the fund with no clear outline on how the funds were being utilized.

This is after it emerged that even though the Ministry of Petroleum channels the fund to oil companies as a subsidy, the information on the same has remained scanty.

Matungulu lawmaker Stephen Mule a petitioner on the fuel prices raised eyebrows on where the funds are being channeled as the public has remained in the dark for years on the actualization of the fund.

“You mean for 20 years Kenyans have been contributing to this levy and we don’t know where the money is being kept. For a whole 20 years?” he posed.

Kamau however dismissed speculation that the fund is subject to misuse due to lack of a clear outline saying it is audited every financial year.

“At this point I don’t know whether to call it a fund or a levy. I can attest the fund is audited every financial year because it’s treated as a special fund. As a matter of fact, the fund is domiciled in this house under the Special Funds committee,” Kamau assured.

Concerns also emerged following the petroleum ministry’s failure to actual estimates of the total amount of funds in collected through the petroleum levy.

“As you well know, it is not within the purview of Petroleum ministry to account for the levy fund. Ministry of Treasury are the custodian of the fund, they will be in a better position to give the facts,” Kamau said.

He said the ministry was working on a draft Petroleum Bill that will institute a legal framework for the establishment of a Petroleum Consolidated Fund.

“The draft bill is currently on public participation once it is passed, we will have a legal framework for establishing a stabilization mechanism that will cure the crisis on high fuel prices,” he said.

Since 1998, the taxpayer has been contributing 40 cents per litre of petrol to the petroleum development fund.

Since the beginning of the 2020/2021 financial year, Kenyans have been contributing Sh5.4 to the kitty.

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