Energy and Petroleum Cabinet Secretary Opiyo Wandayi has faulted Uganda for reportedly disrupting the implementation of the Government-to-Government oil deal.
Wandayi, who spoke while appearing before the National Assembly’s Departmental Committee on Energy, noted that Uganda’s decision to start importing refined petroleum products through the Uganda National Oil Company had affected the regular monthly shipments under the deal.
According to the CS, this, in turn, reduced the number of cargoes being imported into the country, thus impacting the agreed timelines for the importation of the remaining consignment.
“In light of this, the Cabinet approved the extension of the Government-to-Government arrangement for an additional 24 months upon expiry of the current contract,” said Wandayi.
He explained that the G-to-G arrangement was introduced at a time when Kenya was experiencing severe pressure on its foreign exchange reserves.
Wandayi stated that since the introduction of the fuel importation agreement with the three Gulf companies, the deal had played a significant role in reducing fuel prices at the pump.
The CS outlined the key objectives of the G-to-G deal, which included easing United States dollar liquidity challenges, reviving the interbank forex market, and stabilising the foreign exchange rate.
"This was primarily because petroleum imports were previously paid for in US dollars, leading to a strain on dollar availability," Wandayi stated.
He added that the arrangement is now expected to run until the first quarter of 2028, by which time it is hoped that the economy will have fully stabilised.
Wandayi also gave an update on the recent hike in fuel prices, attributing it to the sudden rise in global oil prices, mainly caused by the ongoing war in the Middle East.
He further cited rising global oil prices, which increased by 6.72 per cent for Super Petrol, 9.33 per cent for Diesel, and 8.15 per cent for Kerosene between May and June 2025.
During the meeting, lawmakers demanded accountability for the use of the Ksh25 billion from the Petroleum Development Levy allocated in this year's budget.
