The Kenyan government, under the leadership of President William Ruto, has decided to prolong its partnership with three companies from Saudi Arabia for an additional year, according to a report by Bloomberg.
During a recent meeting, Daniel Kiptoo, Director-General of the Energy and Petroleum Regulatory Authority (EPRA), explained that this renewed agreement permits the three companies to provide oil products on credit until December 2024. These firms include Saudi Aramco, Abu Dhabi National Oil Corporation Global Trading (ADNOC), and Emirate’s National Oil Company (NOC).
In the wake of this extension, the initial payment, totaling Ksh12 billion, is due on September 25, 2023. An additional payment of Ksh60 billion is also scheduled to mature by the end of October. This extension is expected to draw the attention of other oil companies previously excluded from bidding for oil contracts until January 2024.
Initially signed in March, the deal was designed to last nine months, with only three local oil companies—Gulf Energies, Oryx, and Galana Oil Kenya Limited—included in the arrangement. These three companies were granted government tenders to import oil during this period and sell it to other marketers.
However, 96 other oil firms, desiring a share of the deal, filed a lawsuit claiming they were unfairly excluded from the market.
At the time of the deal’s signing, President Ruto lauded it, asserting it would benefit the country by saving Ksh 68 billion monthly and reducing the pressure on the dollar. Without this agreement, Kenya would have been obliged to secure Ksh74 billion (USD 500 million) in dollars each month to cover the cost of imported oil.
Despite the government’s claims, many Kenyans remain skeptical about whether the deal has achieved its primary objective of ensuring a consistent and affordable oil supply.
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