Parliament summons Wandayi over substandard petroleum imports

The National Assembly Committee on Energy has summoned Energy Cabinet Secretary Opiyo Wandayi, to explain allegations surrounding importation of substandard petroleum products, even as he warned fuel marketers against hoarding.

Energy Committee Chairman David Gikaria yesterday said Parliament is fully on the matter, insisting that the integrity of the country’s supply chain is not negotiable and any individual or entity found culpable whether through omission, commission or negligence will be held to account. He said that any breach, whether in quality standards, importation procedures or regulatory oversight constitutes a direct threat to consumers’ safety, investor confidence, environmental protection and overall stability of the petroleum sector.

Even as he said that there should be enough fuel supply to last at least next two weeks, the situation across a majority of pump stations across the country tell a different story as long queues are witnessed in a bid to purchase the commodity.

“In exercise of our oversight mandate, the committee has formally required the Cabinet Secretary for Energy and Petroleum, alongside all relevant institutions across the petroleum value chain to appear before the committee on Thursday, April 9,” Gikaria said in a press conference held in Parliament.

The committee will be seeking to establish the origin and authorisation of the alleged substandard petroleum products, whether due process under the Government-to-Government (G2G) framework was circumvented or undermined, the adequacy or failure of quality assurance, inspection and enforcement mechanisms as well as the extent of responsibility across institutions and private sector players.

“We call upon all investigative and enforcement agencies to leave no stone unturned in uncovering the truth. The Kenyan public deserves full transparency and this matter must be pursued to its logical conclusion without fear or favor,” Gikaria stated.

Even as these concerns are under active review and in light of the reported cases of looming fuel stockouts in various parts of the country, Gikaria said that the fuel supply position as submitted to the National Assembly by National Treasury, Cabinet Secretary on April 2 provide context and forestall unnecessary public anxiety.

The Nakuru Town East Mp said the submissions indicated that the country’s petroleum stocks levels as at March 30, Super petrol was at 138,623 metric tons to cover 16 days, diesel was at 207,841 metric tons enough for 19 days and jet fuel at 150,398 metric tons, which is estimated to cover 49 days.

To meet both domestic consumption and regional transit obligations, the monthly import requirements are 255,000 metric tons of Super petrol, 170,000 metric tons of diesel and 80,000 metric tons of jet fuel.

Expected deliveries under the March – April import schedule indicated 290,000 metric tons of super petrol to cover 47 days, 182,900 metric tons of diesel for 20 days and 60,000 metric tons of jet fuel to cover 25 days.

At the same time, the import plan for May to July is projected at 510,000 metric tons for Super petrol, another 765,000 metric tons of diesel and 200,000 metric tons of jet fuel.

He, however, stated that a detailed confirmation on fuel stock sufficiency, quality integrity and overall supply sustainability will be provided by the CS and relevant agencies during the scheduled appearance before the Committee today.

The committee said it expects a comprehensive briefing, with the CS required to provide clarity on the integrity, enforcement and any possible breaches within the petroleum importation framework, including adherence to the G2G arrangement, identify specific regulatory or institutional lapses and confirm the current status of fuel stocks and quality surveillance systems, including testing, certification and monitoring processes.

On measures being undertaken to stabilize the petroleum market, Gikaria said the CS will be expected to tell the country the application and sustainability of the fuel price stabilization mechanisms, interventions to cushion consumers from price volatility, particularly in light of potential market distortions and steps being taken to restore public confidence in the sector.

“The Committee will also require a clear roadmap on strengthening inter-agency coordination, sealing regulatory gaps and enhancing enforcement to prevent any recurrence of such incidents. We urge the public to remain calm and avoid speculation as the matter is being handled with the seriousness it deserves. The Committee will continue to keep the country informed and will not hesitate to recommend decisive legislative, regulatory and enforcement actions where necessary,” he said.

On Tuesday, Wandayi ordered One Petroleum Limited to remove a controversial fuel shipment from the country immediately.

The CS said the 60,000-metric-tonne consignment of Super Petrol had been imported “in contravention of the procedures set out under the G-to-G contractual framework with international suppliers,” warning that the move posed risks to the country’s fuel supply system.

He said the government noted that the consignment was priced significantly higher than fuel imported under the Government-to-Government arrangement.

“This consignment is priced at Sh198,000 per metric ton, compared to Sh140,000 per metric ton under the G-to-G arrangement, an increase of Sh58,000 per metric ton, which would result in an approximate rise of Sh14 per litre in pump prices on this consignment alone.”

The CS also ordered that oil marketing companies “should neither pay the invoices nor uplift product from this consignment,” and directed the Energy and Petroleum Regulatory Authority (EPRA) to exclude the shipment from monthly fuel cost computations