The Kenyan government extended the deal with Saudi Arabian firms for the supply of petroleum products to December 2024.
Initially, the deal was meant to lapse in December 2023 where Kenya obtained fuel on credit from Saudi-based firms.
The three companies are Saudi Aramco, Abu Dhabi National Oil Corporation Global Trading (ADNOC), and Emirate’s National Oil Company (NOC).
When the deal was signed in March 2034, it was expected to run for nine months with only three local oil firms, Gulf Energies, Oryx, and Galana Oil Kenya Limited, included in the deal.
Speaking on Monday, September 18, Energy and Petroleum Regulatory Authority (EPRA) Director-General Daniel Kiptoo backed the deal indicating that it was key to reducing pressure on the dollar.
Kiptoo added that the extension would help ease the burden of payments associated with the product.
President William Ruto also supported the deal which he noted was key to helping the country to destabilize the dollar which was sliding to its highest weakening the Kenyan shilling.
“As a country, we can buy fuel using local currency and from this month of April, all our fuel marketers will be able to use the shilling in buying our fuel products,” Ruto stated.
International Monetary Fund (IMF) estimated monthly payment obligations associated with the government-to-government deal at about Ksh103 billion.
The deal extension came after fuel prices hit a record high in the country. In the September review, petrol jumped to Ksh211.64, Diesel Ksh200.99, and kerosene Ksh202.61 per liter.
Senior government officials attributed the sharp rise to the global surge in fuel prices. Deputy President Rigathi Gachagua stated the sharp rise was a global phenomenon however vowed to find a solution.
