Narok Senator Ledama Olekina has expressed strong reservations about Kenya Kwanza’s government-to-government (G2G) oil agreement with Gulf countries, describing it as a significant error in judgment.
The procurement process involved Kenya forming a bilateral pact with oil-producing nations in the Gulf region to obtain oil on credit, with the aim of stabilizing domestic fuel prices. This arrangement allows Kenya to purchase fuel using its local currency, eliminating the need to secure U.S. dollars for transactions. However, Ledama questioned the wisdom behind this deal, asserting that it fails to address one of the fundamental issues – the elimination of middlemen.
Regarding the fuel prices, Ledama remarked, “When it comes to fuel prices, the trickery lies in the actual costs of fuel! Yes, the government facilitated the G2G deal with Gulf countries (a significant misjudgment, if you ask me), but in reality, where does the government truly fit in?” President William Ruto defended the government’s decision, stating that it had pursued the government-to-government approach to stabilize fuel prices within the country.
It’s important to note that this method lacks regulation under Kenyan procurement laws, raising concerns about its compliance with the public procurement system as outlined in the Constitution.
Despite these concerns, the first shipment of fuel procured on credit from Gulf nations arrived at the Mombasa port in March. However, the much-anticipated stabilization of fuel prices did not materialize as expected by consumers.
In the September-October fuel price review, the Energy and Petroleum Regulatory Authority (EPRA) imposed a substantial increase, raising Super Petrol prices by Sh16.96, Diesel by Sh21.32, and Kerosene by Sh33.13 per litre. Consequently, the prices of these commodities in Nairobi reached Sh211.64, Sh200.99, and Sh202.61 per litre, respectively.
Trade Cabinet Secretary Moses Kuria has already issued a warning, indicating that the situation is likely to worsen in the coming months, with petrol prices projected to reach Sh260 per litre by February.
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