Kenya has extended its oil supply agreement with Saudi Aramco, Emirates National Oil Company (ENOC), and Abu Dhabi National Oil Company (ADNOC) for two more years. This partnership continues to stabilize fuel prices and guarantee a reliable supply of petroleum products. Since March 2023, these Gulf companies have been supplying Kenya through a government-to-government arrangement.
Energy Cabinet Secretary Davis Chirchir confirmed the extension, stating, “We have renegotiated the terms with our Gulf partners to secure more favorable prices and ensure the deal remains beneficial to all parties involved.” The renegotiated terms include reduced supplier margins, which are expected to ease pump prices. This should provide relief to Kenyan consumers and businesses struggling with high energy costs. President William Ruto described the agreement as a “game changer” for the economy, noting, “This model protects our economy from the shocks of the international oil market and allows us to plan better with more predictable fuel supply.”
The deal includes a deferred payment plan of up to 180 days, helping Kenya reduce immediate pressure on foreign exchange reserves. By extending the arrangement, the government aims to maintain financial stability while exploring strategies to stabilize the shilling and balance payments. The Energy Ministry emphasized that consultations with key stakeholders, including the private sector and regulators, were essential during the renegotiation process. Chirchir added, “We engaged with the private sector and regulators to ensure transparency and inclusivity in revising the contract terms.”
While some industry players argue that the deal sidelines local oil marketers, the government maintains that it benefits the overall economy. Reduced exchange rate volatility and consistent fuel availability are considered vital advantages. The agreement underscores Kenya’s commitment to enhancing energy security and strengthening economic resilience.
Extending this agreement is a crucial step in Kenya’s economic recovery. By collaborating with international partners, the government aims to shield citizens from global fuel price shocks while building a stable financial and energy future. This move highlights Kenya’s proactive approach to securing economic stability and fostering growth.
