MPs summon Petroleum CS, PS in Sh1.3bn payments probe

A House team is investigating possible collusion between Energy ministry officials and vessel owners amid revelations that Sh1.3 billion was paid this year in demurrage costs, which ended up increasing fuel prices.

The National Assembly Finance and Planning committee claimed suspicious payments were made to owners of some vessels that docked at the Port of Mombasa.

The MPs now want both Petroleum and Mining Cabinet Secretary John Munyes and his Principal Secretary Andrew Kamau to appear before them and explain.

The committee chaired by Homa Bay woman representative Gladys Wanga says documents before them indicate there was a deliberate delay of vessels at the Port of Mombasa in order to siphon taxpayers’ billions in demurrage charges.

Demurrage is the cost levied for the time a ship takes to offload cargo at the Mombasa port. In the case of fuel, the costs accrue until the consignment is stored by Kenya Pipeline Company.

Taxpayers pay vessel owners Sh4.5 million per day for any delay at the port.

Documents tabled before the committee indicate taxpayers have paid Sh1.3 billion for the vessels at the port between January and August.

The lawmakers expressed concern that the figure is likely to hit Sh2 billion by the end of the year, hence the need for Mr Munyes and Mr Kamau to appear before them today and explain the inefficiency at the port that leads to unnecessary penalties that ultimately increase fuel prices.

According to the committee, about 60 vessels are currently at the Port waiting to offload fuel, which arrived on diverse dates between January and June.

The committee yesterday protested over the decision by both Mr Munyes and Mr Kamau to snub them.

“I’m dismayed that we are dealing with a serious matter that affects the public yet both the CS and the PS have failed to appear before us. I found this contemptuous and an indication that the ministry officials are hiding something about the demurrage charges,” Ms Wanga said.

“It is suspicious that some vessels stay at the Port for up to six months and therefore the owners get paid millions of taxpayers’ money, a cost that has a direct impact on the fuel prices, which eventually is borne by the public at the pump,” Ms Wanga added.

Ms Wanga said the public could not continue to pay billions to vessel owners over inefficiency of public officials who are paid to do their work efficiently.

A draft report of the committee has recommended that Kenya Ports Authority should fast-track the completion of Kipevu Oil terminal 2 in order to reduce or eliminate the demurrage costs.

On Tuesday, Speaker Justin Muturi, while granting the committee an additional seven days, said the issue of demurrage needs to be looked at in depth as it contributes to the increase in fuel prices.

Roysambu MP Ndirangu Waihenya accused the PS of deliberately delaying the committee’s work, yet it was only given an extension of seven days to table its report since Kenyans are suffering due to high fuel prices.

“We have powers to summon him from wherever he is to come and explain to the public about these demurrages unless he is an accomplice of the people misappropriating the demurrage funds,” Mr Waihenya said.

Mr Kamau is said to be out of the country on official duties and requested the committee to postpone the meeting on demurrage charges by two weeks.

The committee, however, has to table its report next week, debated and passed or rejected by the House.

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