The Office of the Government Spokesperson has insisted that President William Ruto's government-to-government oil deal with the Saudi Arabian Government was necessary.
In a detailed seven-page statement on Thursday clearing the state from the controversial Ksh17 billion deal, Spokesperson Isaac Mwaura pointed an accusatory finger at former President Uhuru Kenyatta's regime for leaving an economy on the brink of collapse.
He argued that when Ruto took over the reins in September 2022, some petrol outlets were already facing fuel shortages caused by the deficit of dollars to pay for consignments, leaving Oil Marketing Companies (OMCs) exposed.
Ruto, as a result, was forced to enter into a deal utilising the local currency and extending the payment period from five days to six months.
"All this persisted until the Kenya Kwanza Government came to power in an effort to prevent the economy from the brink of shutdown over the paralysis in the petroleum supply chain in the country, the new administration had to look for a quick and viable solution resulting to the government-to-government mode of supply, which is consistent with Kenya Kwanza manifesto pledge of using the value chain model rather than the supply chain, in order to cushion the hustlers from cartel-like behavior in the pricing and supply of basic and essential commodities," read the statement in part.
At the beginning of November, the Ugandan Government accused middlemen in Kenya of frustrating its efforts to import cheap fuel.
Two weeks later, its Parliament passed the Petroleum Supply Amendment Bill 2023, cushioning its government from relying on the middlemen selling fuel at exorbitant prices.
The Bill allows the Uganda National Oil Company (UNOC) to import the oil directly from the refineries.
On Tuesday, Rwanda, Burundi, the Democratic Republic of Congo, and South Sudan also expressed their reluctance to continue importing fuel through the Port of Mombasa.
"The region is not asleep and has aligned infrastructure projects to manage our dominance. It has options, and in the long run, Kenya shall lose big time," a CEO based in Kenya told BBC.
Tanzania Fuel Prices
Mwaura further explained that the lower fuel price announced in Tanzania differed from that of Kenya due to differences in computation styles between the two countries.
In Tanzania, a litre of petrol costs Tsh3,274 (Ksh198.42) compared to Kenya's Ksh203.47.
"Kenyans have been comparing prices in Kenya with regional prices thinking that the government inflates our pump prices but this is to the contrary," explained the statement
"For example, the disparity in price computation between Kenya and Tanzania is because of differences in the pricing methodologies. The impact of the different pricing methodologies has led to a temporary price advantage for Tanzania."
In Kenya, the pricing is done by the Energy Petroleum Regulatory Authority (EPRA) in line with the Petroleum Pricing Regulations of 2022, which require the volume and cost of cargo to be considered.
