Last Thursday, I addressed the country on the deal that His Excellency William Ruto presented to last April which he said would ease the economic suffering of Kenyans.
In my address, I raised very specific concerns and made very specific demands, all directed at the Executive branch of government that initiated and announced this deal, complete with what it was expected to achieve.
To my shock and dismay, these past few days, the issues I directed at the Executive have been taken over and responded to by the legislature and, more shockingly, by oil companies.
We always knew that the legislative arm of government has been captured by the Executive and can no longer perform its oversight role. The response by the Leader of Majority therefore did not come as a complete surprise.
It confirmed what we already know. What came as a complete shock was the response from the oil companies.
We have reached a situation where oil marketing companies, all with shady histories, feel confident and compelled to answer Kenyans when Kenyans seek answers from their government! This is the clearest indication of state capture and complete takeover by cartels.
The cartels speak for the government and the government speaks for cartels. Kenyans noticed that when one Anne Njeri laid claim to the Ksh17 billion worth of diesel then in the seas, it was two Cabinet Secretaries who came out to state that the oil belonged to Galana Energies.
Galana has hired the government. Over this same weekend however, Busia senator Hon. Okiya Omtata tabled evidence of the government withdrawing Ksh42, 965,290,402 from the consolidated fund, without the authority of Parliament and spending it on what it called “subsidies to private financial enterprises.”
The senator tabled evidence that in June 2023, at the closure of the 2022/2023 Financial Year, the National Treasury withdrew Ksh17, 224, 718, 718, 632, to subsidize “private financial enterprises.” He was able to establish a link between the Kshs. 17,224,718,632 which was unconstitutionally withdrawn from the Consolidated Fund in June 2023 to subsidize unnamed private financial enterprises and the Kshs. 17 billion contested oil shipments between Ms Njeri and the two Cabinet Secretaries.
I concur with the senator’s suspicion that Njeri is the ‘private financial enterprise’ funded by the Kshs 17,224,718,632 illegally from the Consolidated Fund and received by the Ministry of Petroleum.
The CS for Energy and Petroleum Chirichir and National Treasury CS Njuguna Ndungu have certainly committed criminal offences, abused office and gone against the constitution.
They stole money from the Consolidated Fund, in addition to spending monies way above what Parliament approved. They must not only resign.
They must also be prosecuted. I want to speak today both to the cartels and the Executive, who, it appears, are joined at the hip. The oil firms, the National Assembly majority leadership and CS Davis Chirchir have talked of there being a G-to-G memorandum of understanding in this oil deal.
Once again, I am asking that the documents be shared with the public. These must be documents signed by a representative of the Kingdom of Saudi Arabia, the United Arab Emirates and the Republic of Kenya, not that of the Ministry of Energy and Petroleum and ADNOC Global Trading Ltd or Emirates National Oil Company.
Kenyans will have noticed that even as our Ministry of Energy and Petroleum was signing deals with state-owned corporations in the Middle East, our own National Oil Corporation was completely left out.
NOC has a legal mandate to participate in all aspects of the petroleum industry and is wholly owned by the Government of Kenya through joint ownership by the Ministry responsible for the petroleum function.
How does Chirchir explain the exclusion of this corporation in favour of private, shady firms? We also know that for a ship to leave one port for another, loaded with goods, it has to get a letter from the Ministry of Energy and Petroleum indicating that the ship is authorized to carry and offload the cargo in Kenya.
Who cleared the Njeri ship to travel to Kenya? How did it offload? Over the weekend, we were told that the deal has resulted in so-called structured sourcing of the dollar.
If that is the case, why has the exchange rate not improved? How come it has not lowered the cost of oil? What benefits have the so-called structured sourcing of the dollar brought to wananchi? We are being told that since the deal, we have stopped paying for oil in dollars. We believe that Kenyans don’t care whether oil is paid for in dollars, shillings or rupees.
They care about the cost of oil. Nonetheless, we are challenging the government to share with Kenyans evidence of payment of oil in Kenya shillings.
Show us documents indicating when the payment was made in Kenya shillings, the bank accounts and the recipients of the payment.
This regime has told Kenyans so many fictitious stories that only documentary evidence will help the country separate fact from fiction.
The oil companies and the Ministry of Energy and Petroleum have claimed that it is easy to verify that corporate tax is being paid by the oil companies. We agree that this shouldn’t be a difficult task.
So we are asking these firms to table the evidence of meeting the corporate tax obligations. Don’t tell us, show us.
We hope the Kenya Revenue Authority is listening to our demand for evidence of corporate tax compliance by Oryx, Galana and Gulf oil companies.
The Ministry of Energy and Petroleum must also table the Supplier Purchase Agreement in this deal. If the deal was to benefit Kenyans, its details should not be hidden from them.
In subsequent comments on this matter since last Thursday, I have questioned why the Director General of the Energy and Petroleum Regulatory Authority Mr. Daniel Kiptoo could go to the Middle East, participate in the oil negotiation, and then come back to Nairobi to regulate prices.
How can EPRA be a player and referee at the same time? Where is the ethics and professionalism in this? How can this be a compliance with the Public Officer Ethics Act? We are still waiting for answers.
When Kenya signed this deal, we had the regional market, especially that of Uganda in mind. The Gulf nations of Saudi Arabia and the UAE were aware that we import for the region. T
his in itself makes it impossible that we could have had a G-to-G. Whatever the case, we want to know what happens to the oil we intended for Uganda and onward markets.
Are we going to be stuck with and forced to buy it at the old high prices while costs are falling elsewhere?
Is that the reason Tanzania’s has gone down while ours stayed unchanged?
Are we stuck with old prices because the negotiators already locked the prices and the oil is coming in the quantities that were agreed on in March?
So many things still do not make sense despite the massive space bought by the oil companies to explain themselves and the efforts of the government to fool and confuse Kenyans.
In light of these developments, I am today calling on three specific institutions that are paid by the Kenyan tax-payers to exercise their mandate and get to the bottom of this saga as follows:
First, the Energy and Petroleum Regulatory Authority. This institution, under the chairmanship of distinguished scholar, Hon. Justice (Prof) Jackton B. Ojwang has the primary duty to protect the people of Kenya from predatory practices.
Indeed, it is given protection in the course of its work through a legally mandated independence. Section 9(3) of the Energy Act says:
Except as otherwise provided in this Act, the Authority shall be independent in the performance of its functions, and exercise of its powers and shall not be subject to the direction or control of any person or authority.
Under the Ruto regime, EPRA has been reduced to being a price fixer and enables predators in the government to exploit Kenyans by overcharging them for petroleum products.
Section 10 of The Energy Act gives the Authority the duty among others to:
monitor in consultation with the Competition Authority, conditions of contractors’ operations and their trade practices; investigate complaints or disputes arising from petroleum operations; ensure enforcement and compliance with the national values and principles; protect consumer, investor and other stakeholder interests.
The challenge is now on its Chairman to rise to the true mandate of the Authority and investigate the following:
1. Violation of Consumer rights under the Bill of Rights in the G to G arrangement.
2. Transparency of fuel contracts signed by all parties in the alleged G-to-G arrangement.
3. Criminal collusion through price fixing and other corrupt trade practices in the G-to-G arrangement
4. The controversy surrounding the dispute between Galana Energies Limited and Ann Njeri Njoroge.
The second institution we are challenging is the Office of the Auditor General.
Since her appointment, the Auditor General CPA Nancy Gathungu has displayed courage in her approach to duty.
We are calling upon her to execute her mandate in this matter and investigate the following:
- The procurement processes engaged in by the Ministry of Energy and Petroleum in the recruitment of suppliers and their local agencies.
2. The criteria applied by the G-to-G arrangement in arriving at the prices at which Kenya is to buy fuel.
3. The criteria applied by the Energy and Petroleum Regulatory Authority in arriving at the prices the Kenyan consumer shall buy petroleum products.
4. The criteria applied in the G to G arrangement in arriving at the demurrage and other levies and charges. The third institution we are calling out is the Ethics and Anti-corruption Commission.
We take note that Chairman Bishop David Oginde and the Ethics and Anti-Corruption Commission have been silent over the goings on in the petroleum sector.
Allegations of corruption, collusion and conflicts of interest have been made but no investigation has begun.
The challenge is for the Chairman to start working on the matters raised and to investigate the following:
- Conflict of interests by government officials in the alleged G-to-G arrangement.
- 2. Bribery and corrupt commissions and kickbacks from revenues raised in the G to G arrangement.
3. Criminal collusion through price fixing and other corrupt trade practices in the G-to-G arrangement and violation of procurement laws in the recruitment of suppliers and their local agencies.
Once again, we reiterate that we stand by every word that we have said on this oil deal.
We will not relent on this matter until the truth is known and punishment that fits the crime is meted out.
In the meantime, heads must roll at the Energy Ministry and National Treasury.