Kenya Defends G-to-G Fuel Deal Amid Criticism of Middlemen

The Kenyan government has defended its Government-to-Government (G-to-G) petroleum import arrangement, citing its success in addressing severe dollar shortages and stabilizing fuel supplies.

According to the Ministry of Energy and Petroleum, the G-to-G program was introduced in March 2023 as a solution to the country's pressing need for dollars to pay for imports.

The government said that oil marketing companies were struggling to access US dollars, leading to exchange-rate pressure and expensive currency swaps. To alleviate this issue, Kenya signed Master Framework Agreements with Aramco Trading Fujairah, Abu Dhabi National Oil Company (ADNOC) Global Trading, and Emirates National Oil Company (ENOC) for petroleum supplies on 180-day credit terms.

The arrangement aimed to ease demand for dollars, preserve foreign exchange reserves, and stabilize the petroleum supply chain. Under this model, international oil companies were allowed to select licensed Kenyan counterparties to handle local logistics, taking on significant performance risks in high-value transactions.