Govt Explains Why Fuel in Ruto-Saudi Deal is Idle Despite High Prices

Imported oil docking at the Port of Mombasa on April 13, 2023.
Imported oil docking at the Port of Mombasa on April 13, 2023.
Photo
Ministry of Energy

Energy Cabinet Secreatry Davis Chirchir on Wednesday, April 26,  explained that Kenyans were yet to use the government to government imported oil from Saudi Arabia due to existing stock in the market.

Speaking during a meeting with fuel stakeholders, the CS acknowledged that the oil imported by the government arrived in the country on April 13 and was yet to be disbursed to oil importers.

He added that the oil would hit the market in the coming days once the existing stock - imported using the dollar was depleted.

According to Chirchir, the fuel would be in the market before the Energy and Petroleum Regulatory Authority (EPRA) does its review for May fuel prices.

Energy Cabinet Secretary Davis Chirchir speaking during a meeting with fuel stakeholders on April 26, 2023.
Energy Cabinet Secretary Davis Chirchir speaking during a meeting with fuel stakeholders on April 26, 2023.
Photo
Ministry of Energy

"I know we received the first cargo eight days ago and because of the line field, guys are still taking the old product imported on the dollar. I want to believe in the next five to six days, the product taken on the Kenyan shilling will hit the market," he stated.

On the other hand, he defended the move by President William Ruto's administration to sign a deal with companies from the Middle East over oil importation noting it was beneficial to Kenyans and the economy.

He revealed that Ruto saved the economy from losing Ksh430 billion in the deal.

However, he confirmed that the government could also revert back to the old model of oil importation after pressure on the dollar and the shilling eases

"Depreciation of the shilling to the dollar cost the economy Ksh43 billion to the extent that we moved the dollar from Ksh147 to Ksh137 means.

"The government-to-government model is just there to give us comfort for six months. The government-to-government is being used to release the pressure on the dollar and support the macro challenges of the country," he stated.

The government signed an agreement with Saudi Aramco and Emirates National Oil Company in March to supply oil products to the country.

Ruto's move came after there was a shortage of the dollar in the country which was contributing to the high fuel process in the country.

Average fuel prices in the months of March and April were Ksh179.30 for super petrol, Ksh162 for diesel, and ksh145.94 for kerosene per litre.

President William Ruto addressing Meru residents on Saturday April 22, 2023
President William Ruto addressing Meru residents on Saturday, April 22, 2023.
PCS