Energy Cabinet Secretary Opiyo Wandayi./FILE
The Ministry of Energy and Petroleum has defended Kenya’s Government-to-Government fuel import arrangement, rejecting suggestions of wrongdoing in the sourcing and distribution of refined petroleum products.
Energy Cabinet Secretary Opiyo Wandayi said the programme was introduced at a time when Kenya was facing an acute shortage of US dollars, with the foreign exchange crisis threatening the supply of essential imports and putting pressure on the economy.
In a statement issued on Sunday, Wandayi said petroleum imports were particularly demanding on the country’s foreign exchange reserves, with payments previously required within five days of cargo arriving.
“At the time, all imports of refined petroleum products were paid for in US Dollars within a short period of 5 days after cargo receipt. The total import bill on account of refined petroleum products amounted to US Dollars 500 million, being about 35% of the total import bill,” he said.
The government subsequently entered into a 2023 arrangement with Aramco Trading Fujairah FZE, Abu Dhabi National Oil Company Global Trading Ltd and Emirates National Oil Company (Singapore) Private Limited.
Under the arrangement, the companies supplied refined petroleum products on credit terms of up to 180 days, easing the immediate pressure on Kenya’s dollar reserves.
Wandayi said the international oil companies appointed licensed Kenyan companies to handle local supply and logistics. The government provided a list of oil marketing companies for vetting.
Gulf Energy Limited, Galana Energies Limited and Oryx Energies Kenya Limited were among the first companies selected, before additional oil marketers were brought into the arrangement.
“As the arrangement progressed, the transaction was de-risked leading to higher confidence by the IOCs and subsequent nomination of more counterparties who are: One Petroleum Limited, Asharami Synergy Limited and BE Energy Limited,” Wandayi said.
He also outlined changes in freight charges under the arrangement.
Initially, freight costs stood at $97.50 per metric tonne for Super Petrol, $118 for diesel and $114.25 for Jet A1.
The rates were later reduced in September 2023, with Super Petrol freight falling to $90 per metric tonne, diesel to $88 and Jet A1 to $111.75.
A further review in March 2025 reduced the agreed rates to $84 per metric tonne for Super Petrol, $78 for diesel and $97 for Jet A1.
Wandayi said the revised rates had remained unchanged since then.
He defended the arrangement, saying it had helped preserve Kenya’s foreign exchange reserves while contributing to stability in the dollar-shilling exchange rate.
The ministry's defence comes amid renewed scrutiny of the fuel supply arrangement following remarks by Uganda President Yoweri Museveni.
Museveni said Uganda had previously been buying petroleum products through intermediaries in Kenya at higher premiums.
Speaking at the groundbreaking ceremony for a 320-million-litre petroleum storage terminal in Uganda on September 17, Museveni said a Kenyan senator had alerted him to the arrangement.
“The Republic of Uganda was buying petroleum products through middlemen in Kenya. Can you imagine that? And the person who woke me up first was a senator from Kenya,” Museveni said.
According to figures cited by Museveni and Uganda's Permanent Secretary for Energy Irene Batebe, Uganda previously paid a premium of $118 per metric tonne for diesel, compared with $83 under its current arrangement with Vitol and Uganda National Oil Company.
For Super Petrol, the premium was cited as having fallen from $97.50 to $61.50 per metric tonne.
The premium for aviation fuel was also said to have dropped from $114.25 to $79.25 per metric tonne.
The figures have brought renewed attention to the cost of petroleum imports and the role of intermediaries in regional fuel supply chains, even as Kenya maintains that its Government-to-Government arrangement was designed to address the country's foreign exchange constraints and safeguard fuel supplies.
