Kenya Defends G-to-G Fuel Deal Amid Renewed Public Scrutiny
The Government of Kenya has defended its controversial Government-to-Government (G-to-G) arrangement for importing refined petroleum products, saying it was introduced to address a severe dollar shortage that threatened fuel supplies and economic stability.
According to Energy and Petroleum Cabinet Secretary Opiyo Wandayi, the arrangement was designed to cushion Kenya from the effects of the US dollar liquidity crisis in 2022. At the time, oil imports had to be paid for in US dollars within five days of cargo receipt, while refined petroleum products accounted for about Sh65 Billion of the country's import bill.
The Government entered into Master Framework Agreements with Aramco Trading Fujairah, Abu Dhabi National Oil Company Global Trading and Emirates National Oil Company Singapore for the supply of refined petroleum products on 180-day credit terms. The arrangement was intended to ease immediate dollar demand and allow the country to accumulate additional foreign reserves estimated at Sh65 Billion per month.