The Lower Eastern Times Opening The Third Eye
The Ministry of Energy and Petroleum has defended Kenya’s Government-to-Government (G-to-G) fuel import programme, dismissing allegations of irregularities in the procurement and distribution of refined petroleum products.
Energy Cabinet Secretary Opiyo Wandayi said the arrangement was introduced during a period when Kenya was experiencing a severe shortage of US dollars. The foreign exchange crisis had put pressure on the economy and threatened the country’s ability to pay for critical imports.
In a statement released on Sunday, Wandayi explained that petroleum imports were placing significant pressure on Kenya’s foreign exchange reserves because suppliers previously required payment in US dollars within five days of receiving cargo.
He said refined petroleum imports accounted for about $500 million, or roughly 35 percent, of the country’s total import bill.
To ease the pressure, the government entered into an arrangement in 2023 with Aramco Trading Fujairah FZE, Abu Dhabi National Oil Company Global Trading Ltd and Emirates National Oil Company (Singapore) Private Limited.
Under the deal, the international suppliers agreed to provide refined petroleum products on credit for periods of up to 180 days. This arrangement reduced the immediate demand for dollars and gave Kenya more time to settle its fuel import bills.
Wandayi said the international oil companies then appointed licensed Kenyan firms to manage domestic supply and logistics. The government supplied a list of oil marketing companies to undergo the necessary vetting.
Gulf Energy Limited, Galana Energies Limited and Oryx Energies Kenya Limited were among the initial companies selected. More oil marketers were subsequently added to the programme.
According to Wandayi, the arrangement gradually became less risky for the international suppliers, resulting in increased confidence and the appointment of additional Kenyan counterparties, including One Petroleum Limited, Asharami Synergy Limited and BE Energy Limited.
The Cabinet Secretary also provided details on how freight charges under the programme had changed over time.
At the beginning of the arrangement, freight charges were $97.50 per metric tonne for Super Petrol, $118 for diesel and $114.25 for Jet A1.
The charges were revised in September 2023, bringing the rates down to $90 per metric tonne for Super Petrol, $88 for diesel and $111.75 for Jet A1.
A further review in March 2025 resulted in additional reductions, with the agreed rates falling to $84 per metric tonne for Super Petrol, $78 for diesel and $97 for Jet A1.
Wandayi said the latest rates have remained in place since the March 2025 review.
He maintained that the G-to-G arrangement had helped Kenya conserve its foreign exchange reserves while also supporting stability in the exchange rate between the dollar and the shilling.
The ministry’s explanation comes amid renewed scrutiny of Kenya’s fuel import arrangement following comments by Uganda President Yoweri Museveni.
Museveni claimed Uganda had previously sourced petroleum products through intermediaries in Kenya, resulting in higher costs.
Speaking on September 17 at the groundbreaking ceremony for a 320-million-litre petroleum storage facility in Uganda, Museveni said a Kenyan senator was among those who initially drew his attention to the issue.
He said Uganda had been purchasing petroleum products through middlemen in Kenya, questioning why the country was doing so.
Figures cited by Museveni and Uganda’s Permanent Secretary for Energy Irene Batebe indicated that Uganda had previously paid a diesel premium of $118 per metric tonne, compared with $83 under its current arrangement involving Vitol and Uganda National Oil Company.
For Super Petrol, the cited premium reportedly declined from $97.50 to $61.50 per metric tonne.
The cost of aviation fuel was also reported to have fallen, with the premium dropping from $114.25 to $79.25 per metric tonne.
The figures have renewed debate over the cost of petroleum imports and the involvement of intermediaries in regional fuel supply chains. Kenya, however, continues to maintain that its Government-to-Government arrangement was introduced primarily to ease foreign exchange pressures and ensure a reliable supply of fuel.
