This archive report was first published on 6 October 2021.
Motorists Pay Sh1.3 Billion for Delayed Oil Vessels ¶
Published on October 7, 2021
Motorists paid Sh1.3 billion in demurrage charges to shipping vessels that delayed clearing oil cargo at the Mombasa port, partly increasing pump prices.
The National Assembly's Finance Committee revealed that consumers of petroleum products paid the billions of shillings in waiting fees for delayed ships, with some vessels pocketing more than Sh55 million for an 11-day delay in clearing petroleum cargo.
The charges form part of the landed costs of petroleum products and the increase is passed on to consumers. Pump prices last month hit historic highs of Sh134.72 for a litre of petrol while diesel jumped Sh7.94 to Sh115.6.
According to records obtained by the committee, between January and June, Sh1.3 billion was paid in demurrage charges to 60 shipping lines. The money is transferred to the consumer immediately, said Gladys Wanga, chair of the National Assembly Committee on Finance and National Planning.
The committee is now recommending a reduction of the levy that raises funds for the fuel subsidy scheme from Sh5.40 per litre to Sh2.90 and abolishing other levies as one of the ways of curbing the jump in pump prices.
The MPs also want the inflation adjustment on fuel waived this year and the annual adjustment to be done bi-annually starting next year.
