This archive report was first published on 6 October 2021.
On October 6, 2021, the National Assembly's Finance Committee revealed a shocking diversion of Sh. 18.1 billion fuel subsidy funds by the National Treasury under the leadership of Cabinet Secretary Ukur Yatani.
The funds, meant to cushion motorists from high fuel prices, were instead diverted to support the operations of the Standard Gauge Railway (SGR), a Chinese-run project.
The fuel subsidy scheme, established in July 2020, had been funded through the collection of Sh. 5.40 per litre. However, the National Treasury depleted the fund in August by using Sh. 3.8 billion to upgrade infrastructure in the energy sector and Sh. 18.1 billion to support SGR operations.
As a result, fuel prices in Kenya skyrocketed to the highest levels in history, with a litre of petrol selling at Sh. 134.2 in Nairobi and nearly Sh. 150 in some parts of the Northern region.
Despite the High Court stopping the National Treasury's plan to raise fuel prices even higher through the increase of excise duty rates for fuel by 4.97 per cent, the Finance Committee has instructed the National Treasury to use the Sh. 18.1 billion to reinstate the fuel subsidy.
