Kenya inks deal with Saudi Arabia to import fuel on credit
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Kenya inks deal with Saudi Arabia company, Aramco and ADNOC to import fuel on credit for six months
Kenya inks deal with Saudi Arabia company, Aramco and ADNOC to import fuel on credit for six months.
Kenya has reached a deal with Saudi Arabia and the United Arab Emirates (UAE) to import oil products for six months on credit terms.
An earlier government solicitation seeking proposals for the sale of diesel and super fuel products resulted in the transaction being finalized on Friday.
According to reports, seven separate companies submitted bids for procurement.
Then, the government decided on Abu Dhabi National Oil Corporation (ADNOC) and Saudi Aramco as its suppliers.
Two cargo consignments of diesel will be delivered each month by Saudi Aramco, while three cargo consignments of super gasoline will be delivered each month by ADNOC.
The agreement will be based on credit, which means that the Kenyan government would pay for the oil products later.
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The agreement will relieve the pressure that the Kenyan government has been under amid the dollar shortage.
“There will be a price adjustment due to the freight charges. Also, IOCs (International Oil Companies) will be free to pay using the Kenyan Shilling to ease spot pressure on the dollar,” said Kenya’s Energy Cabinet Secretary, Davis Chirchir.
The Kenyan government has been exploring different options to secure a steady supply of oil products and the G2G deal with Saudi Arabia and the UAE is expected to provide a more immediate solution to the fuel shortage crisis.
The Kenyan government has been pushing for more G2G deals with other countries to ensure a steady supply of oil products and stabilize fuel prices in the domestic market.
The move is also part of Kenya’s long-term strategy to reduce its reliance on imports and increase domestic production of oil and gas resources.
The deal will help the country cope with the fuel shortage and also curb the demand for dollars that has weakened the local currency.
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