Raila terms Ruto oil deal with Gulf nations a grand scam
Raila Odinga the Azimio la Umoja leader said Kenya is losing billions of shillings in taxes because the three companies picked to spearhead the deal do not pay the 30 per cent corporate tax.
Azimio leader Raila Odinga has poked holes into the Government-to-Government (G-to-G) oil deal with Saudi Arabia and the United Arab Emirates which he claims is a grand scam.
Raila now says there was actually no G-to-G and that Kenya did not sign any contract with the two Gulf nations.
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"Only the Ministry of Energy and Petroleum signed a deal with state-owned petroleum companies in the Middle East. Why Ruto chose to characterise the deal as a G-to-G is the first red flag that points to mischief in this deal," Raila claimed.
"We now know that the characterization of this deal as G-to-G was meant to shield three Kenyan companies from paying 30 per cent corporate tax."
The opposition leader said Kenya is losing billions of shillings in taxes because the three companies picked to spearhead the deal do not pay the 30 per cent corporate tax.
"Shielding the companies the three companies from this tax is the reason Ruto told Kenyans that it was G-to-G. Your guess is as good as mine on who is pocketing the unpaid corporate tax. But the burden of the unpaid corporate tax is passed to Kenyans at the pump," Raila said during a press conference on Thursday at the Jaramogi Oginga Odinga Foundation.
Raila said the land-locked countries that depend on Kenya for oil are abandoning the country's pipeline because it has become too expensive.
He said other than keeping the cost of oil permanently high in Kenya, the deal is costing the country dearly in terms of trade in petroleum with landlocked neighbours.
"Ideally, Kenya should have provided a pipeline and storage capacity allocation for the Uganda market. Kenya should also have allowed the direct participation of Uganda oil marketers in sourcing petroleum products through the northern corridor route," he added.
"But because corruption was written into the deal, the Ruto administration could not allow neighbours in, fearing exposure."
Loss of revenue
Raila said the Kenya Pipeline Company (KPC) is set to lose substantial business to Tanzania.
"Uganda’s shift to the central corridor will most certainly influence Rwanda, the Eastern Democratic Republic of Congo, and South Sudan. As KPC loses business, it will charge more for its products to stay afloat, hence the ever-rising cost of petroleum products," he said.
The Azimio leader said this will have a ripple effect and drive a number of oil marketing firms out of business, leading to job losses and revenue loss for the government.
He also said the cost of fuel shot up significantly after the deal.
"Why have things moved from bad to worse since the deal? The deal was a scam for which we now demand full disclosure and full accountability. It is corrupt and rotten to the core," he said.
"It is state capture by Ruto and company and a conspiracy against the country. Ruto is collapsing the country while feeding Kenyans on lullabies."
Raila said the deal is shrouded in deep secrecy and that to date, only two documents have been made public - the Master Framework Agreement with petroleum trading entities and the Open Tender System modified agreement with marketers.
He said the Supplier Purchase Agreement between the Middle East Oil firms and their hand-picked distributors in Kenya has never been seen and challenged Ruto to publish this document.
"Nobody knows how Gulf Energy, Galana Oil Kenya Ltd and Oryx Energies Kenya Limited got nominated to handle local logistics. But the hand-picked distributors are selling oil to us at almost twice the price from bulk suppliers. These companies are also manipulating delivery date ranges so that they can maximize prices," Raila said.
Demands
The opposition leader now wants Ruto to immediately cancel the contract and revert to the Open Tender System which ensures a guaranteed supply of petroleum products.
He also wants the Ethics and Anti-Corruption Commission (EACC) to the bottom of the deal and expose the individuals benefiting from it.
"The men and women who came up with this self-serving deal must be surcharged and sacked," Raila said.
Raila also wants the EACC and the Directorate of Criminal Investigations must investigate the tax compliance status and pricing model of the three oil companies.
"The Kenya Revenue Authority must come clean on the tax compliance status of the three oil companies and explain why they are being enabled to evade billions in taxes while ordinary Kenyans are being harassed for taxes," said.
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