The National Oil Corporation of Kenya (Nock) cannot account for 149,773 liquefied petroleum gas (LPG) cylinders as well as grills and burners that were purchased by the Ministry of Petroleum and Mining for distribution to low-income households.
The State oil marketer stores’ records revealed inventories comprising 161,448-6kg cylinders but only 11,675-6kg cylinders were included in the financial statements as at the end of June 2023.
A report by Auditor General Nancy Gathungu shows that Nock inventories comprised 161,448- 6kg cylinders, out of which 5,444 had been filled with gas, 329,303 burners, 330,115- 6kg grills, 60,000 horse pipes and 84,499 double burner stoves.
But as of June 30, 2023, Ms Gathungu said only 11,675-6kg cylinders, 12,869 burners, and 87,147 grills with an aggregate value of Sh20,501,191 had been included in the corporations’ financial statements.
“The rest of the items were not included in the Nock’s financial statements, a position management attributed to lack of formal authority from the Ministry of Petroleum and Mining to transfer ownership of the items to the corporation,” she said.
“Management also indicated that 22 burners were said to have been collected as samples by Kenya Bureau of Standards and Directorate of Criminal Investigation in 2018 and 2019 respectively but were not supported by any documentary evidence.
”Ms Gathungu said a review of records and physical verification revealed that the 6kg cylinders purchased in Module I and two-burner low-pressure tabletop cookers, purchased under Module II of the project together with its accessories were yet to be distributed and were lying at the warehouses.
She noted that there is uncertainty in the implementation of the project due to lack of sufficient working capital.
“In the circumstances, the value for money on the expenditure incurred on the project could not be confirmed.”
Ms Gathungu also raised questions on 105,838 defective cylinders valued at Sh190,812,991 stored at the corporation’s Nairobi National Terminal.
She said the management did not provide measures regarding the defective cylinders, considering that their numbers have been increasing over the years.
“In the circumstances, the value for money on the expenditure of Sh190,812,991 incurred on the defective cylinders of could not be confirmed,” Ms Gathungu said.
The Ministry of Petroleum and Mining delegated to the corporation the responsibility of implementing the Mwananchi Gas Project on behalf of the national government through a letter dated September 16, 2021.
The project was intended to promote the use of modern cooking fuels among low-income households and entailed the distribution of subsidised LPG cylinders, grills and burners purchased by the Ministry of Petroleum and Mining.
Ms Gathungu said according to the Ministry, funds realised from sales were to be used to purchase additional gas.
She said the pilot programme for the project roll-out was expected to kick off during the 2020/2021 financial year but the corporation lacked sufficient working capital to purchase LPG to be used in filing of the cylinders.
The government was to construct facilities to store the cylinders at local distribution points for ease of access by the beneficiaries.
The government launched the Sh3 billion cheap cooking gas plan in October 2016 to contain the destruction of forests through reduction on use of charcoal, firewood, and kerosene for fuel.
The Ministry of Petroleum was to buy five million 6kg gas cylinders each retailing at a subsidised cost of Sh2,000 and targeted at low-income homesteads.
The project was to be implemented in two phases with the first module entailing the distribution of subsidised filled 6kg cylinders fitted with a grill and a burner as a pilot in 11 constituencies within Nairobi.
The second module involved the distribution of filled 6kg cylinders with a smart metering device, a horse pipe, and two low burner tabletop cookers.
But a tech firm, Attain Enterprises Solutions, sued Nock for terminating its contract for the provision of a platform for online payments by beneficiaries of the subsidised gas.
The project was also delayed after an independent inspector contracted by the ministry following safety concerns raised by consumers who found the cylinders defective.
The project was suspended in 2019 after the Directorate of Criminal Investigations (DCI) launched investigations into how fraudulent contractors supplied thousands of faulty gas cylinders.
