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National Assembly probes delays at port that lead to high fuel prices

NATIONAL
By Moses Nyamori | October 7th 2021

Finance and National Planning Committee chair Gladys Wanga. [David Njaaga, Standard

Lawmakers are investigating possible collusion between top officials at the Petroleum and Mining Ministry and owners of shipping lines in high demurrage charges.

Document before the National Assembly’s Finance and National Planning Committee reveals that the taxpayer spent Sh1.3 billion in demurrage charges between January and August.

The amount was paid to 60 vessels that docked at the Port of Mombasa with petroleum and petroleum products.

Demurrage charge is the fee paid when a ship arrives at the terminal to discharge oil and has to wait beyond the stipulated time.

It is charged on an hourly rate based on the agreed market price and it emerged yesterday that a vessel attracts Sh4.5 million per day it spends at the port.

The charges are directly linked to the current high cost of fuel as they form part of the retail prices.

The document by the committee chaired by Homa Bay Woman Rep Gladys Wanga disclosed that some vessel owners were paid in excess of Sh50 million after being at the port for 11 days.

The fresh details were made public on a day the committee issued summons to Petroleum Principal Secretary Andrew Kamau to appear before it without fail today.

Kamau was to appear before the committee yesterday but failed as he is out of the country on official duty. 

Also ordered by the committee to appear today is Petroleum and Mining Cabinet Secretary John Munyes.

Wanga said the committee seeks to establish the unnecessary delay in clearing the vessels and whether they are deliberate to earn certain individuals millions of shillings.

“Between January and August, we have paid demurrage charges amounting to Sh1.3 billion. This money is transferred to the consumers directly,” she said.

“It may look small for every litre of fuel but this is money paid for our own inefficiency and at times it is man-made.

“The extent of this issue is wide. Taxpayers paid Sh55 million for a single vessel and we are paying an average of Sh30 million for every ship. It is like people are being paid to be inefficient,” said Wanga.

Petroleum and Mining Cabinet Secretary John Munyes. [David Njaaga, Standard]

Members of the committee protested that the running of the department had been turned into a one-man show by the PS.

They demanded that CS Munyes take charge of the ministry and unmask those behind the inefficiency at the Port of Mombasa.

“Summons shall be issued by the clerk. We will order the clerk to issue summons to PS to appear before this committee tomorrow at 10am.

“The CS must also now explain what he is doing and if this ministry has been turned into a one-man show we have to know,” Wanga said.

The committee had on Tuesday sought a seven-day extension to make further inquiry of demurrage costs that it said was directly linked to the high fuel prices.

The team has up to next Tuesday to table the report in the House.

Committee members said they will not allow the ministry officials to derail the probe, insisting that they have to conduct a thorough investigation before tabling the report.

Vice-chair Ndirangu Waihenya said the committee has powers similar to those of the High under articles 125 and 152 of the Constitution to invite anyone and will not hesitate to compel witnesses to appear and provide the required information.

The committee wants the PS to provide details of the vessels that have continued to benefit from the delay at the port.

“This committee has the powers to summon him to come here and shed light unless he’s colluding with those involved in misappropriating demurrage. I request you to find the PS to be out of order and order him to come here tomorrow without fail,” said Waihenya.

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