UK firm handed contract to audit Kenya Pipeline fuel loss

The State has started a forensic audit on the Kenya Pipeline Company (KPC) to establish the amount of fuel lost through a theft syndicate but reported as spillage.

Petroleum Principal Secretary Andrew Kamau said at a briefing in Nairobi yesterday that UK-based Chan Oil had been selected to undertake the audit and was expected to give a report within seven weeks. The firm was picked on Monday.

There have been delays due to differences between KPC and oil marketing companies on how to go about conducting the audit.

The audit report was initially expected to be out by December 31 last year.

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The ministry later extended the date for completion of the audit report to January 31.

KPC last year reported that 11.6 million litres of fuel had been lost through leakages and vandalism on the pipeline over a two-year period.

Stealing products

The petroleum products lost would translate to Sh1.2 billion at the average cost of fuel at Sh100 a litre.

The cost of petroleum has averaged more than Sh100 over the two years. 

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The cost of the fuel lost through spillage was recovered from both consumers and insurance companies.

However, it has turned out that the products might not have been lost through leaks on the pipeline and instead KPC officials had been stealing the products and reporting it as spills and vandalism.

Oil marketing companies had expressed concern about the level of losses and sought to have an audit on the accuracy of stocks that KPC had been releasing to them over the two-year period.

Some of the company’s senior executives have since been forced out in connection with claims of corruption and are facing abuse of office charges.

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StateKPCUK-based Chan OilAndrew KamauAudit