Kenya Defends Government-to-Government Fuel Deal Amid Uganda Controversy

The Kenyan government has clarified terms on its Government-to-Government fuel deal after claims of dubious supply to Uganda.

Energy Cabinet Secretary Opiyo Wandayi said the arrangement was inked in 2023 to alleviate a severe US dollar shortage that threatened to crash the economy and drain the country's foreign exchange reserves.

The total import bill for refined petroleum products at the time amounted to $500 million, or about 35% of the total import bill.

To alleviate dollar liquidity challenges, Kenya brokered a deal with Aramco Trading Fujairah FZE (Aramco), Abu Dhabi National Oil Company (ADNOC) Global Trading Ltd and Emirates National Oil Company (Singapore) Private Limited (ENOC) to supply refined petroleum products on extended credit terms of 180 days.

The International Oil Companies then opted to appoint licensed counterparties in Kenya for local supply logistics, which the government provided a list of all Oil Marketing Companies (OMCs) for vetting.