Three local companies were handpicked by the Middle East oil giants to supply the country with fuel after a series of engagements with the Kenyan government.
Reports indicated that Gulf Energy Limited, Oryx Energies Kenya Limited, and Galana Oil Kenya Limited were nominated to subsequently supply fuel to other local oil marketers.
The three local companies were selected after a series of engagements involving a government-government arrangement between Kenya and Saudi Arabia.
Prior to the government deal which was announced in March 2023, over 100 companies had placed their bids to compete for the tender to import fuel from the Gulf states.
However, the Ministry of Energy reportedly wrote to the three local companies on March 16, 2023, informing them that they were handpicked by three companies drawn from the United Arab Emirates.
The Gulf companies included Saudi Arabia's Aramco, Abu Dhabi National Oil Corporation Global Trading (ADNOC) and Emirate’s National Oil Company (NOC).
The international companies were selected to supply fuel to the country for a period of nine months beginning April 2023.
This was, however, met with criticism as various stakeholders argued that the deal locked them out of the tender until 2024.
In January 2023, Energy Cabinet Secretary Davis Chirchir published new regulations regarding fuel importation into the country - which involved a government-to-government arrangement for the procurement of oil.
The regulations, however, required oil companies to competitively bid for the deal through the open-tender system.
The news came as President William Ruto promised that the pressure on the dollar would be eased as transactions for oil could be done using the Kenyan currency.
In particular, he lauded Mohammed Hassan (Member of the Council of Economic Advisors), Davis Chirchir (Cabinet Secretary for Energy) and Joseph Oketch ( head of the Electricity and Renewable Energy Directorate – EPRA) for their efforts in averting a crisis.
"Today as a country we can buy fuel using local currency and from this month of April, all our fuel marketers will be able to use the shilling in buying our fuel products. In the next month or so, I foresee the dollar stabilising to an exchange rate of Ksh115," Ruto stated while launching the Performance Contracting Report for the 2021/2022 Financial Year on April 11, 2023.
