Kenya Renews Gulf Oil Import Deal, Secures Lower Pump Prices
- Saudi Aramco, Emirates National Oil, and Abu Dhabi National Oil will continue to supply Kenya with petrol, diesel, kerosene, and jet fuel under a 180-day credit plan
- EPRA director general Daniel Kiptoo revealed the two-year contract renewal will start at the end of 2025, following Kenya's completion of importing the already negotiated shipments
- Kiptoo expressed approval of the G-to-G deal, pointing out that the imports on credit helped stabilise the shilling against the US dollar
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Japhet Ruto is a journalist at with over eight years of experience reporting on finance, business, and technology. He provides insightful analysis of economic trends in Kenya and globally.
Three state-owned Gulf companies have agreed to cut petroleum prices under an extended fuel supply deal with Kenya, offering relief to consumers at the pump.
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What are the new fuel import prices?
Kenya will now purchase a tonne of diesel from Saudi Aramco, Abu Dhabi National Oil Company, and Emirates National Oil Company for $78 (KSh 10,081.50 at the current exchange rate) under the new government-to-government (G-to-G) agreement.
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This represents an 11.3% decrease from the current price of $88 (KSh 11,374), while the price of petrol will drop from $90 (KSh 11,632.50) to $84 (KSh 10,857).
Bloomberg reported that freight and premium prices for jet fuel will decline by 13% to $97 (KSh 12537.25).
What's the oil import deal?
Daniel Kiptoo, the director general of the Energy and Petroleum Regulatory Authority (EPRA), announced that Saudi Aramco, Emirates National Oil, and Abu Dhabi National Oil will continue to supply Nairobi with petrol, diesel, kerosene, and jet fuel under a 180-day credit plan.
According to Kiptoo, the contract renewal will start at the end of 2025, following Kenya's completion of importing the already negotiated shipments.
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Previously, Kenya had extended the agreement for oil supplies to the end of 2024.
In the last 10 years, trade between Kenya and the United Arab Emirates (UAE) has more than doubled.
UAE is Kenya's second-largest import market and the sixth-largest export market.
How Kenya is benefiting by importing fuel on credit
Kiptoo explained that Uganda's move to source its petroleum directly after terminating its prior agreement with Kenya was the reason for the delay in shipping the remaining oil consignment into the nation.
The EPRA boss expressed approval of the G-to-G deal, pointing out that the imports on credit helped stabilise the shilling's value relative to other major world currencies, such as the US dollar.
According to the Central Bank of Kenya (CBK) the value of the local currency has increased by 17%, since the implementation of the deal.
On Thursday, April 3, CBK quoted the shilling at 129.25 per unit against the US dollar.
What are fuel prices in Kenya?
EPRA irked Kenyans by maintaining fuel prices on Friday, March 14. The announcement came after the price of crude oil fell by 16% globally.
The regulator kept the retail prices of petrol, diesel, and kerosene in Nairobi at KSh 176.58, KSh 167.06, and KSh 151.39, respectively.
During the period under review, the average landing cost of imported super petrol increased by 1.34%.
Proofreading by Asher Omondi, copy editor at.
