NAIROBI, Kenya, Nov 18 – President William Ruto has now promised that the fuel prices will reduce in the subsequent monthly review pointing out that the Government to Government deal was not aimed at reducing oil prices but easing the pressure on the dollar.
President Ruto said international oil prices and the prevailing forex rate determine the local fuel cost.
Government critics have questioned why world prices have been rising which coincided with the start of the G-to-G supply.
“What I will not lie about is that the fuel prices are being handled by those selling us oil. We don’t have our own oil reserves we buy from other countries. We have agreed with them that we will scrutinize the buying prices,” he said.
The Head of State said Under the G-to-G framework, the local OMCs pay for petroleum in Kenya Shillings (“KES”) and are no longer required to source for dollars in the local market.
He revealed that neighboring countries of Uganda and Tanzania have resorted to taking up the G-to-G structured approach since it’s the cheapest system of procuring oil from the Gulf countries.
“Right now our neighbors in Uganda, Tanzania a and Rwanda are busy trying to secure G-to –G deal from Saudi Arabia. What I did has helped us because I don’t have any hiccups in importing oil,” President Ruto stated.
Currently,a litre of super petrol is selling at Sh217.36 in Nairobi for the next one month until December 14, according to the latest monthly fuel review from the Energy and Petroleum Regulatory Authority (EPRA).
On October 14, last month, EPRA increased the price of petrol by Sh5.72, which lapsed today at midnight.
However, a litre of petrol could have risen to Sh229.37 if the government had compensated for the extra margin of Sh12.01 using the Petroleum Development Levy (PDL).
President William Ruto’s government opted for government-to-government oil supply contracts in March this year after the shilling tumbled to record lows.
The government ditched the Open Tender System (OTS) that has been in use for importing fuel for nearly a decade in favor of direct procurement under a government-to-government deal with Saudi Arabia and the United Arab Emirates.
In the G-to-G deal, the three Gulf State-owned firms Saudi Aramco, Abu Dhabi Oil Company (ADNOC), and Emirates National Oil Company (Enoc) were given leeway to handpick local oil marketing companies that would distribute fuel on their behalf.
Odinga is pushing for the country to revert to the Open Tender System which he says ensures a guaranteed supply of petroleum product saying the G to G business model is hurting the consumers through exorbitant prices passed on the consumers.
