Fuel woes to go on as energy agency fails to act

Uncertainty on whether the government would implement the 16 percent Value Added Tax on petroleum products despite a court order to freeze it persisted Friday as the concerned agencies said they had not been served with the orders.

The Energy Regulatory Commission, which is expected to provide guidance to oil marketers on the levy, insisted that it was yet to be properly served with the directives more than 24 hours after they were issued by the High Court.

ERC Director-General Pavel Oimeke said the regulator asked for the original documents after copies were submitted to its offices on Friday.

“By this afternoon, we had only seen copies. We sent them back. We will make an appropriate response once we are properly served with the orders,” Mr Oimeke told the Nation.

CONTEMPT OF COURT

A service affidavit by Mr Felix Adero, who was sent to serve the orders to the National Treasury and ERC, shows that the regulator got them at 10.30am through its registry on the first floor at its Eagle House office.

Mr Adero had been sent by Mr Ken Amondi, the lawyer who filed the suit that temporarily stopped the implementation of the VAT.

Mr Adero said there were no legal officers at ERC offices to receive the files as they were held in a meeting at Treasury.

“I went to the registry and served the order to Miss Rita Mukami, who received them but failed to sign and stamp them. She said the stamp was out of her reach, adding that she had no authority to sign any legal document,” Mr Adero said in the affidavit, which also confirmed that Treasury received the documents.

ERC and Treasury, the main respondents in the case filed by three people representing Sumawe Youth Group, may face contempt of court charges should the VAT of fuel remain in force.

REVERSE FUEL PRICES

Last weekend, a similar scenario played out when the new tax was meant to start while an amendment pushing for its postponement was pending before the President, a situation that led to anxiety among oil marketers.

They had to wait until Saturday evening for price guidance from the commission.

Mr Amondi of Amondi and Company Advocates said he may file contempt of court proceedings against ERC and Treasury on Monday even as his clients wait for Wednesday when the case will be mentioned and directions given.

“Photocopies would have been enough because the whole concept of serving a court order is for the purpose of knowledge,” the lawyer said.

“We may institute contempt of court proceedings. The commission should have given a notice to the marketers to stop them from charging high prices the moment the courts squashed the VAT, unless another order revising this one had been obtained.”

PRESIDENTIAL ASSENT

The meeting of the ERC legal team at Treasury building, according to an inside source, was reviewing the legal options available to keep the status quo.

The options include making applications on Wednesday when the matter comes for hearing and appealing the order.

Treasury Cabinet Secretary Henry Rotich - who moved quickly last Friday directing the Kenya Revenue Authority and the commission to effect the levy, did not respond to text messages or calls from the Nation on Friday.

The Cabinet Secretary, National Assembly Speaker Justin Muturi and lawmakers failed to agree on the way out of the tax stalemate on Thursday, with the clock ticking on the presidential assent window of 14 days.