Government responds to Raila dossier on the government-government fuel deal
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Energy CS Davis Chirchir dismisses Raila dossier on government-government fuel deal between Kenya and gulf countries
Energy CS Davis Chirchir dismisses Raila dossier on government-government fuel deal between Kenya and gulf countries.
In a statement to newsrooms on Thursday evening, CS Chirchir said that the Kenya Kwanza administration, upon coming into power, put out a tender for government-owned international oil companies to bid for the supply of petroleum on 180-days deferred payment terms and a contract period of 270 days.
He said this was done as Oil Marketing Companies were over the last two years unable to access petroleum products over an alleged lack of USD liquidity and outstanding subsidies from the government.
The Energy Cabinet Secretary said the government had received bids from; Emirates National Oil Company, Abu Dhabi National Oil Company, Saudi Aramco, Petrosa & Trafigura, Vitol Bahrain, and the Owned Company of the Republic of Azerbaijani
However, the tender was canceled after the bidders failed to meet the set requirements.
“Contrary to the assertion that the government selected/handpicked the Nominated Oil Marketing Companies (OMCs), the selection of the Nominated OMCs is the prerogative of the International Oil Companies (IOCs) in line with the Master Framework Agreement.”
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However, the government opted to nominate counterparties to handle local logistics.
The IOCs nominated Gulf Energy Limited, Galana Energies Limited, and Oryx Energies Kenya Limited as their counterparties in the transaction.
The Energy minister further stated that the government-to-government deal was aimed at solving a forex liquidity problem which he said was threatening the security of supply of petroleum for the country and the region.
He went on to address Mr. Odinga’s claims on the allegedly hiked prices of fuel in the country, saying the cost of petroleum is computed by the Energy and Petroleum Regulatory Authority (EPRA) based on the volume and cost of cargoes discharged at the Port of Mombasa between the 10th of the previous month and the 9th of the pricing month.
This comes after Raila Odinga termed the government-to-government fuel deal a scam meant to benefit a few state individuals.
“This shady business model is being deployed by all the companies that were retained in the Ruto deal. They buy at low prices, delay in discharging, then ask to be allowed to offload at higher prices and the cost is passed to consumers,” Raila alleged.
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