National Oil Corporation of Kenya, a government-owned parastatal to start importing fuel at lower prices from August after Kenya -Saudi Arabia deal
The National Oil Corporation will be shipping fuel from Saudi Arabia at lower prices than the global rates in the latest push by the government to lower pump prices.
In an interview held on Monday, June 27, NOCK CEO, Leparan Ole Morintat noted that the corporation would get fuel from Saudi Arabia’s Aramco.
Morintat noted that the trial phase would begin in August 2022 and officially roll out in October 2022.
Under the deal, the National Oil Corporation will import 30 percent of the country’s monthly petroleum requirements.
Nock says a Memorandum of Understanding has already been signed.
“We already signed the MoU and the next phase is negotiating the contract terms, we are waiting on them as from last Sunday,” Nock Chief Executive Officer Leparan ole Morintat told Business Daily.
“The plan is to start trials in August, for two months and see the impact of the exclusive prices that Saudi Aramco will be giving us. Then we will fully start in October,” he added.
Part of the agreement involves Aramco paying for the shipment of products and NOCK repaying within 90 days.
Saudi Aramco is one of the biggest oil businesses in the world; well-established across Asia, Europe, and the United States.
This occurs after Treasury CS Ukur Yatani indicated that the government would end the fuel subsidy program due to the increased worldwide costs.
Kenya has so far spent over Ksh67 billion as subsidies to offset the high prices in the current financial year.
“For this reason, a gradual adjustment in domestic fuel prices will be necessary in order to progressively eliminate the need for the fuel subsidy, possibly within the next Financial Year,” Yatani stated in a statement.