What you need to know:
- Kenya announced the credit-based fuel sourcing deal with Saudi Aramco, Emirates National Oil Company, and the Abu Dhabi National Oil Company on March 13.
- Kenya started importing diesel, super petrol and jet fuel on credit in a deal the government said is meant to ease demand for the dollar and prop up the battered shilling.
Kenya is set to pay Sh247.43 billion ($1,649,535,513) to three Gulf oil firms as proceeds from the sale of fuel sourced through the government-to-government deal.
The Senate Committee on Energy heard that the United Arab Emirates and Saudi Arabia oil companies have already pocketed Sh127.26 billion ($848,378,738) from the supply of fuel on credit since the deal was sealed in March, 2023.
Kenya announced the credit-based fuel sourcing deal with Saudi Aramco, Emirates National Oil Company (Enoc), and the Abu Dhabi National Oil Company (Adnoc) on March 13.
Kenya started importing diesel, super petrol and jet fuel on credit in a deal the government said is meant to ease demand for the dollar and prop up the battered shilling.
“We have paid $686 million since March. We have a balance of $1.087 million that is pending at the Kenya Commercial Bank (KCB) that will be paid once the letter of credit (LCs) mature,” Mr Paul Limo, the Gulf Energy chief executive officer, told the MPs.
Oryx Energies boss Angeline Maangi said the firm had paid Saudi Aramco $85.85 million for fuel supplied to Kenya under credit, leaving a balance of $161 million in the bank pending maturity of the LC’s.
“I have attached a cover letter detailing the oil supplies by Galana. We have $478,064,249.96 of which we have paid $76,525,738 leaving a balance of $401,535,515 that is awaiting the LC to fall due,” Galana Energies CEO Anthony Munyasya told the lawmakers.
The payments were made in September when the six-month credit period for the fuel cargo imports elapsed.
The deal has since been extended to December. Gulf Energies, Oryx Energies and Galana Energies were picked by Emirates National Oil Company, Saudi Aramco, and Abu Dhabi National Oil Company to represent their interest locally.
“We are basically administrators on behalf of the Saudi and UAE international oil companies,” Mr Limo told the committee chaired by Nyeri Senator Wahome Wamatinga.
Mr Limo said the country has to pay for the fuel imports after 180 days and the three firms and KCB have an arrangement where the bank starts buying dollars after 90 days of fuel supply.