Audit Reveals Kenya Kwanza’s Fuel Strategy Falling Short

Kenya Kwanza’s plan to lower fuel prices through a government-to-government (G-to-G) importation deal is proving ineffective, according to a new audit by Auditor General Nancy Gathungu. The report highlights inefficiencies in the scheme, with approximately Sh8 billion in questionable costs passed on to consumers.

Motorists incurred Sh4 billion in irregular demurrage charges and an additional Sh1 billion in undisclosed legal fees, all factored into pump prices between July 2023 and April 2024. Furthermore, Sh2.5 billion was recovered through fuel pricing to cover shortfall financing, a move ordered by the Treasury without consulting the Energy and Petroleum Regulatory Authority (EPRA).

While the G-to-G deal was introduced to stabilize fuel prices and mitigate forex fluctuations, the audit raises concerns over transparency, inefficiencies, and the impact on market competition. The Auditor General also flagged the lack of supporting documentation for key payments, further questioning the sustainability of the arrangement.