President William Ruto’s plans to import cheaper oil through government-to-government deals now hang in the balance, days after the new deal to bypass drawbacks in the oil market was announced by the government.
This follows a petition filed by four petitioners at the High Court on Monday, March 6, to challenge the international tender for a government-to-government oil importation deal that would give a single supplier exclusive rights of supplying all oil products in Kenya.
The Energy and Petroleum Regulatory Authority (EPRA) had announced the new deal as part of the government's measures to alleviate the pressure on foreign exchange reserves in the process of paying for oil by delaying payments for oil products for up to six months.
The six-month delay, according to the government, would help to eliminate the instant demand for the United States (US) dollar in paying for oil imports instantly.
However, local oil retailers opposed the move and are now seeking court orders to halt the government's progress in implementing the new deal.
In the petition, the petitioners through their lawyer Ndegwa Njiru noted that they were excluded in the bidding process for the international tender to supply all petroleum products consumed in Kenya.
According to the petition, the state's move to announce the government-to-government deal would eliminate oil retailers' input in the process of importing oil hence rendering them inconsequential in making decisions regarding the oil market.
Further, the importers argued that the new deal would pose the risk of sabotage from the suppliers which could have far-reaching repercussions for the economy.
"The move to award 100 per cent market share of all the petroleum products consumable in Kenya on the issue that it may pose a serious national security risk in case of sabotage by the proposed supplier," the petition read in part.
In addition, the lawyer urged the court to classify the case as an urgent matter to facilitate a timely hearing.
Speaking during an interview with CNN on Monday, March 6, Trade Cabinet Secretary Moses Kuria announced that Kenya was particularly targeting to partner with Gulf oil-producing nations including Saudi Arabia and the United Arab Emirates.
The announcement came amid concerns over the shortage of dollars in the country which was termed a leading factor of the fluctuations in Kenya's exchange rate.
