Kenya incurred a loss of over Sh6.6 billion in an edible oil import programme aimed at reducing the commodity’s cost. Top officials from the Kenya National Trading Company (KNTC) admitted the losses while addressing the Senate Trade, Industrialisation and Tourism committee, chaired by Seki Lenku Ole Kanar. The officials revealed that despite spending Sh14.4 billion to import cooking oil, they were forced to sell it at a lower price, leading to significant financial losses.
Among the companies involved in importing the oil were Multi Commerce FZC, which was paid $69,894,300 (Sh11.18 billion) to bring in 1.97 million jerricans; Charma Holdings Limited, which supplied 499,174 jerricans for $14,976,720; and Shehena Holdings, which delivered 13,420 jerricans for $402,600.
KNTC’s acting Managing Director, Peter Njoroge, attributed the losses not only to selling the oil at a reduced price but also to fluctuations in the dollar exchange rate, which had shifted from $160 to the shilling down to $130.
Njoroge placed the blame on the previous management for the mistakes that resulted in taxpayers losing over Sh6 billion. “It’s unfortunate that this happened. It’s not a good thing, and as part of the KNTC management, we owe this country an apology,” he said. He assured the committee that the corporation had learned from this experience and would avoid repeating such errors in the future.
He further explained that procuring cooking oil in US dollars was a regrettable decision and announced that the board has since halted further importation, advising future procurement to be conducted in Kenyan shillings.
Purity Kimathi, KNTC’s General Manager for Finance and Business Development, added that to have made a profit, each jerrican of oil should have been sold for Sh4,813, but instead, they were sold at Sh3,700. She cited foreign exchange losses, clearance costs, and housing charges as contributing factors to the loss.
In addition to the Sh6.6 billion lost, senators were alarmed by news of another loss when uncleared jerricans were recently sold at a loss to Enviro Pro Kenya Ltd, which was contracted to reship the oil back to its country of origin.
The Kenya National Trading Company (KNTC) faced further scrutiny over the sale of uncleared cooking oil jerricans, which resulted in significant financial losses. These jerricans, owned by Multi Commerce, Charma, and Shehena—the companies that had imported the oil on behalf of KNTC—were sold to Enviro Pro Kenya for Sh3,028 per 20-litre jerrican. This sale, totaling Sh2.4 billion, led to a loss of approximately Sh500 million, as KNTC had been selling the same jerrican to the public for Sh3,700.
KNTC acting Managing Director Peter Njoroge explained that the lower sale price to Enviro Pro Kenya, owned by Nicholas Mathenge, Tervin Charlo, and Abdikadir Ali, was because this transaction was not subjected to taxation. He clarified that KNTC sold the oil for reshipment to its country of origin due to the product’s approaching expiry date—set for May next year. The oil had to be on shelves six months before its expiry to be fit for consumption, thus pushing for a quick sale.
“What we spent at Sh3,700 was inclusive of the Value Added Tax (VAT), but we sold to this customer at a lower price because it was not taxed,” Njoroge explained. He emphasized that the intention behind the sale was to avoid further losses from unsold, soon-to-expire oil. However, he also noted that the consignment had yet to be shipped out of Kenya.
The revelations angered members of the Senate Trade, Industrialisation and Tourism committee. Marsabit Senator Mohammed Chute, who raised concerns about the cooking oil, condemned the KNTC’s actions, accusing the corporation of endangering Kenyans by selling potentially substandard oil.
Chute said, “This organization is run by criminals and crooks. If the investment was Sh9 billion and you’ve lost Sh6 billion, what are you going to tell Kenyans, and yet the people responsible are walking around freely?”
He called for immediate action to be taken against those behind the mishandling of the edible oil programme.
