State: G2G fuel deal under attack from vested interests

The government has accused powerful cartels within the fuel import sector of opposing the Government-to-Government (G2G) fuel procurement framework, saying the arrangement threatens entrenched middleman interests.

Government Spokesperson Isaac Mwaura said the resistance is being driven by actors seeking to maintain control over the fuel supply chain for personal gain.

“There are vested interests and cartels in the fuel import sector that oppose the G2G arrangements, as they disrupt their middleman roles. The government remains committed to combating corruption and ensuring transparency in the oil sector," he said.

Mwaura defended the G2G model, noting that it was introduced as part of broader reforms aimed at enhancing transparency, curbing corruption, and stabilising fuel prices.

He added that the government remains committed to ensuring accountability in the oil sector.

The spokesperson urged political leaders and stakeholders to support ongoing efforts to manage the fuel situation through policy interventions rather than protests or political posturing.

“We call upon all leaders and stakeholders to support the government's efforts to manage the fuel crisis through sound economic policies rather than protests or political grandstanding, which exacerbate economic challenges,” he said.

He added that since taking office in 2022, the administration has implemented measures to cushion consumers from price shocks, including phasing out costly fuel subsidies and adopting the G2G procurement framework.

Mwaura also pointed out that a significant portion of fuel taxes currently in place were introduced by previous administrations.

He cautioned against politicising recent fuel price increases, attributing them largely to global geopolitical developments, particularly tensions involving the United States, Israel, and Iran, which have disrupted global oil markets.

According to the government, the impact of these global shocks has been felt across multiple countries, with at least 95 nations reporting increases in petrol prices following the escalation of conflict in the Middle East.

Mwaura said Kenya’s price adjustments have been relatively controlled due to the G2G arrangement, which allowed the country to delay the impact of global price spikes until April.

He said that international comparisons show similar trends. In the United Kingdom, petrol prices rose sharply in mid-April to about 158 pence per litre, while diesel reached 191 pence, translating to approximately Sh274 and Sh332 respectively.

South Africa has also recorded a petrol price increase of about Sh25 per litre, with further rises expected.

Mwaura further added that in the region, Tanzania has experienced significant fuel price hikes, with petrol rising by over 33 per cent in April. The increases have been more pronounced in remote areas due to higher transport and distribution costs.

The government warned that such increases pose broader economic risks, particularly in transport and food supply chains, but maintained that Kenya’s situation reflects wider global market dynamics rather than domestic policy failures.