Kenyans may have a reason to smile after the government signed a new deal to import fuel directly from suppliers in oil-producing countries on a credit basis in an effort to stabilize the demand of the dollar and reduce pressure on the shilling that has been falling in recent weeks. With oil imports making up 28% of Kenya’s monthly imports, the move could have a significant effect on the currency’s position. The government-to-government deal, which was signed two weeks ago, will see the country import oil directly from oil producing countries on a six-month credit basis beginning on the 1st April 2023.
The signing of this new deal has sparked mixed reactions with oil marketers going to court to oppose the deal while the non-franchised dealers fully support the move. Kenya is set to receive diesel and super from Saudi Aramco for the next six months and three cargo ships of super petrol every month for the same period from Abu Dhabi National Oil Company.
Read: Oil Marketing Firms In Court To Stop Government-UAE Deal
Although the country expects a stable supply of oil and reduced retail prices at the pump, two major issues have risen among the traders in this sector; biasness by the producing countries on which companies to deal with and the likelihood that small oil marketers will be exploited by the large Oil Marketing Companies.
To address this issue, Irene Kimathi, chairperson of the United Energy Petroleum Association (UNEPEA) said that the OMCs should be supported in such a way that their businesses do not lose out or cause any disruptions in the oil sector as they try to survive in the harsh market.
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