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Oil Prices To Remain High Despite G2G Deal

ByGeff Mwangemi

Apr 12, 2023
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Oil Prices To Remain High Despite G2G Deal .One day after president Dr. William Samoei Ruto announced that the Kenyan Government had sealed a deal with Saudi Arabia and the United Arab Emirates (UAE) to import oil products for the next six months on credit terms there have bee numerous criticisms on the process used as other oil importer companies have been locked out by the deal.

Oil Prices To Remain High Despite G2G Deal. Photo Courtersy.

The deal was reached at on Friday following an earlier government floated a tender seeking bids for the supply of super petrol, and diesel products. Reports claims that the tender received seven bids from different countries. More NewsReasons Why Raila Cannot Accept That Ruto Defeated Him In 2022 Election

Consequently the government chose Saudi Aramco, and Abu Dhabi National Oil Company(ADNOC) as its suppliers. According to the deal, Saudi Aramaco will be supplying two diesel cargo consignments monthly, while ADNOC will be supplying the cargo of petrol product monthly.

According to the agreement reached, the deal will be credit-based meaning that the government will pay for the petroleum products at a later date. The latter will greatly aid in reducing the pressure on the Kenyan government which has facing a shortage of oil products since the invasion of covid-19 pandemic.

Kenyan’s Energy cabinet secretary , Davis Chirchir added that there will be price adjustment due to the freight charges, and also the international oil companies will be free to pay using Kenyan shilling to reduce the pressure on the dollar.

For a long period the Kenyan government has bee exploring various options to ensure a steady supply of the petroleum products and the government to government deal with Saudi Arabia and the UAE is expected to provide more immediate solution to the fuel shortage crisis.

Despite the fact that the deal will help the country cope with oil product shortage in the country, over 100 oil importer companies have filed a petition at the high court of Kenya citing that the deal is unfair as it is not open to all companies and most of them who were able and willing to import the oil products were locked out without consultations. Read AlsoCardi B Reacts To Dalai Lama Video

But, Kenyans have nothing to smile about the deal at the moment. Many Kenyans expected that the oil prices will immediately go down after the deal but this may not be the case. Speaking to the Commercial affairs & Energy Committee, the Director of Regulatory Authority (EPRA), Daniel Kiptoo confirmed that going forwards Kenyans may have to wait more before the oil prices could start dropping. However, he added that over time Kenyans will feel the ease. More NewsCardi B Reacts To Dalai Lama Video

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