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Get to the bottom of KPC fraud allegation

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Over the past week, Kenyans have been treated to shocking news from the Kenya Pipeline Company, about the suspected loss of nearly 23 million litres of fuel worth Sh2.3 billion.

As expected the matter has elicited strong concern from the public, and rattled the oil industry, even as the rank and file at the parastatal live in fear of a looming date with investigators.

Credible sources within the KPC say that some officials have been running a racket that cooks books to overstate the amount of money lost due to small leakages in the pipeline, which are then recorded as spillages. This way, millions of litres of fuel are then siphoned and sold illegally.

As has become the norm with state agencies caught up in such scandals, the KPC has come out fighting, dismissing the fraud claims and generally trying to downplay what to many Kenyans, points to a monumental loss.

Managing Director Joe Sang, no less, has been in a firefighting mode, assuring workers and other Kenyans that all is well at the KPC, while trying to demonstrate that the fuel loss was not an irregularity.

For good measure, he has also appointed a team to prepare a detailed response for the company’s board, complete with evidence proving that the losses that occurred within the past 15 months were not fraudulent.

It is worth noting that the KPC does not own the various petroleum products pumped through its pipeline.

These are the property of oil marketers and a contract between them and the agency obligates the latter to obtain insurance to cover for the fuel in its custody.

This is the reason why oil marketers have been demanding explanations on the whereabouts of the fuel they purchased.

They have also opposed any attempts by the KPC to pass on the financial burden arising from the loss to consumers, who are already burdened by many other taxes.

Insurers, too, have also declared that the loss of 23 million litres of oil “is not payable”, further complicating the matter. But it should not, at all, be passed on to the consumers.

The investigating agencies should move in with speed and establish whether the hefty losses that have been reported are irregular. If this is confirmed, then the relevant agencies owe it to Kenyans to unmask and arrest the individuals behind the scam and ensure they face the full force of the law.

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