Kenya signs oil deal with Saudi, UAE firms to ease dollar pressure
Kenya has entered into agreements with oil giants Abu Dhabi National Oil Company (ADNOC) and Saudi Aramco for the supply of petroleum products with a six months credit period, in a strategy fashioned to lift off pressure on the huge demand for dollars that continues to hurt the local currency.
According to a dispatch from the ministry of energy, Kenya is switching to a longer payment period from the settlement of the consignment on delivery, to remove the need for importers to spend hundreds of millions of dollars every month on the commodity.
Oil importers in East Africa’s largest economy have been spending roughly $500 million every month on fuel imports occasioning huge demand for the dollar in the markets.
“We’ve signed a deal with Saudi Aramco for supply of two products for a period of six months. There will be a price adjustment due to the freight charges. Also, IoC’s will be free to pay using KES to ease spot pressure on USD,” Energy Cabinet Secretary Davis Chirchir said.
Under the agreement, Saudi Aramco will supply Kenya with diesel fuel while the Abu Dhabi National Oil Company (ADNOC) will supply super.
Saudi Aramco, which is controlled by the government of the Kingdom of Saudi Arabia is the world’s largest oil company with significant business operations across Asia, Europe, and North America.
Average pump prices in Kenya have remained unchanged with super petrol retailing at Kes177.30 in Nairobi and diesel at KEs162 per litre, since December last year.