Cabinet approves extension of oil deal with gulf firms

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Kenya will continue to source its refined petroleum products from three gulf companies following an approval by the Cabinet.

This follows the extension of the Government-to-Government (G-to-G) arrangement for the import of refined petroleum products during Cabinet meeting in Tuesday.

The deal which was initiated in April last year and which was set to be concluded at the end of this month has been credit for helping in stabilization of the shilling as well as a cut in pump prices.

The G-to-G arrangement which involves direct sourcing of the fuels as opposed to the previous open tender system brings together Saudi Aramco, Emirates National Oil Company (ENOC) and Abu Dhabi National Oil Corporation (ADNOC).

“Cabinet has approved the extension of the Government-to-Government (G-to-G) arrangement for the import of refined petroleum products. This arrangement has eased the monthly demand for US dollars for petroleum imports, stabilising the shilling-dollar exchange rate at KSh129 from a high of KSh166 and reducing pump prices from KSh217 per litre of petrol to KSh177,” said the Cabinet Office.

The arrangement secures the supply of refined petroleum by allowing payments in Kenya shillings, previously estimated at Ksh 64.5 billion ($500m) a month.

Additionally, the Cabinet also approved the procurement of Liquefied Petroleum Gas (LPG), Heavy Fuel Oil, and bitumen through a centrally coordinated bulk procurement system.

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