Kenyan Energy Minister Davis Chirchir announced on Monday that Saudi Aramco, Emirates National Oil Company (ENOC) and Abu Dhabi National Oil Company have won bids to supply petroleum products to Kenya.
As part of the Kenyan government’s plan, the deal was signed on Friday to nationalise oil imports to control the nation’s foreign reserves. The government has signed a six-month credit-based deal with Aramco and ENOC. It will allow the country to push payments by six months instead of the current arrangement of $500m per month.
Bloomberg reported that the supply contracts would last around 270 days and payments would remain deferred for at least 180 days. It said the government would tap the Eastern and Southern African Trade and Development Bank to advise on a credit facility. It may also involve other lenders such as Standard Bank Group, Abu Dhabi Commercial Bank and Deutsche Bank.
The government plans to start importing as early as April-May 2023 as the country has fallen below the Kenyan Central Bank’s statutory requirement of maintaining minimum imports. According to Reuters, foreign currency traders doubt the plan will pressure Kenyan currency.
According to reports, fuel marketers reported constrained access to US dollars to purchase fuel and gain stocks at Kenyan Pipeline Company depots. This has led to fuel shortages in several stations across the nation.
Reuters also said that some private petitioners had challenged the plan at the High Court. The court will give its initial decision on the case on Tuesday.
