President William Ruto has told off critics of the Government-to-Government fuel importation deal signed between Kenya and three state-owned firms, saying the arrangement has helped cut out middlemen in the trade.
Speaking in New York when he met Kenyans living in the United States, President Ruto said the G-to-G fuel import arrangement Kenya signed with the three International Oil Marketers (IOCs) in March 2023 has been a vital stabiliser of supply and foreign exchange.
He also dismissed claims that handpicked local marketers under the arrangement act as costly middlemen.
“If there is one thing we got right, it is to make sure our fuel has no brokers in between. At the time, most fuel stations had run empty,” said President Ruto.
The G-to-G arrangement has come under sharp focus following claims by President Yoweri Museveni that Uganda was importing fuel from Kenya through middlemen.
“The Republic of Uganda was buying petroleum products through middlemen in Kenya and the person who woke me up first was a senator from Kenya,” said Museveni.
However, according to Ruto, the G-to-G model is currently the best model for Kenya to import fuel, and has been crucial in ensuring a consistent and reliable fuel supply.
“We are dealing with companies that are producers. When I came into office, the first group of people I met were oil marketers. Because our fuel stations had gone dry, we had a shortage of dollars, and we had a problem. We have sorted that problem in a permanent way,” he added, saying the claims by Uganda happened seven years ago before the introduction of the G-to-G model.
Kenya entered into Master Framework Agreements (MFAs) with Aramco Trading Fujairah FZE (Aramco), Abu Dhabi National Oil Company (ADNOC) Global Trading Ltd and Emirates National Oil Company (Singapore) Private Limited (ENOC) in March 2023 for the supply of refined petroleum products under a G-to-G arrangement on extended credit terms of 180 days.
Under the agreement, the three IOCs were required to source local suppliers to help with the fuel logistics. Six Oil Marketing Companies have since been involved in the arrangement, and they include Gulf Energy Limited, Galana Energies Limited and Oryx Energies Kenya Limited, One Petroleum Limited, Asharami Synergy Limited and BE Energy Limited.
According to Energy and Petroleum Cabinet Secretary Opiyo Wandayi, the deal has ensured stability as well as eased pressure on the country’s forex market.
“The main objective of the G-to-G arrangement was to alleviate US Dollar liquidity challenges by ensuring accumulation of additional foreign reserves
to the tune of US Dollars 500 million per month as the US Dollar demand eased due to the extended credit terms,” said Wandayi.
Wandayi said a further renegotiation of the deal in March 2025 guaranteed the supply of super petrol $84 per metric ton, diesel at $78 per metric ton
and Jet A1 at $97 per metric ton.
“These premiums have remained fixed even during the height of the Middle East crisis when the spot market offers went up to as high as $400 per metric ton,” he added.
The ministry said the payment for refined petroleum products using Kenya shillings backed by a 180-day Letter of Credit issued by KCB Bank, MCB, I&M Bank, DTB, Stanbic, UBA and Equity Bank has also ensured accumulation of forex reserves as well as stabilised the US dollar- Kenya shilling exchange rate.
