President Uhuru Kenyatta: How I plan to reduce fuel prices
President Uhuru Kenyatta has officially revealed the state’s plan to put up a new oil terminal, with a wider capacity in efforts to stabilize and reduce fuel prices in the country.
This comes weeks after the National Assembly’s Finance and National Planning Committee tabled a report indicating that the taxpayer spent Sh1.3 billion in demurrage charges between January and August this year.
During his State of the Nation address earlier today, President Uhuru said that the country had lost about Sh1 billion in the period between January and February this year.
“Currently, there is only one oil berth at Kipevu Terminal and it takes a vessel days to offload. This results in huge charges and penalties which are borne by consumers. This makes our economy uncompetitive,” President Uhuru stated.
To tear down the barriers of economic growth, he added, the government was keen on erecting a new oil terminal (Kipevu Terminal II) which will accommodate at least four vessels at a time.
“In the new terminal, it will take five hours to offload a single ship. This will translate to the terminal handling over 20 vessels a day and 7,300 vessels annually against about 300 vessels currently. This together with the improved road network will boost regional trade,” the Head of State said.
“We have doubled road network during my tenure. For example, upon the completion of the Nairobi Expressway, it will take 24 minutes to drive from Mlolongo to Rironi. Now, it takes three hours,” he said.
In October this year, lawmakers probing the rise in fuel prices ordered a review of the pricing formula.
The report proposed that the number of days a ship can stay at the Kipevu Oil Terminal be specified as is the case with Shimanzi Oil Terminal in order to reduce demurrage charges.
The committee initiated the probe after fuel prices jumped to a record high, with taxes taking more than half of the selling price.
The increase in fuel prices elicited uproar among Kenyans seeking to find out why a litre of Petrol lands at the port at Sh60 and retail at over Sh 130.
A document that was tabled before the committee had revealed that taxpayers spent Sh1.3 billion in demurrage charges between January and August.
The amount was paid to 60 vessels that docked at the Port of Mombasa.
Demurrage is the fee paid when a ship arrives at the terminal to discharge oil and has to wait beyond the stipulated time. It is charged at an hourly rate based on the agreed market price. It has emerged that a vessel attracts Sh4.5 million each day it spends at the port.