The government pays Ksh 35.2 billion for a fuel contract

The government pays Ksh 35.2 billion for a fuel contract

The government pays Ksh 35.2 billion for a fuel contract

The Treasury has already met its commitments under the government-to-government agreement reached between Kenya and the Gulf nations by paying Ksh35.2 billion ($238.8 million).The Kenyan government and a few Gulf oil companies, including Saudi Aramco, Emirates National Oil Corporation (Enoc), and Abu Dhabi National Oil Corporation Global Trading (Adnoc), reached an agreement regarding the payment, according to documents shared by the Treasury.

The hard escrow account is shown in the paperwork to be holding Ksh146.7 billion ($1 billion).Until the gasoline supply process is finished, the denominated escrow account is currently holding Ksh115 billion.

According to the Treasury, “so far, these are the earliest maturing LCs under the G-to-G arrangement.”Treasury claimed that the USD 238,842,710.12 worth of LCs have previously been settled (paid in full before maturity) without causing the FX market to become distorted.

The payment is a component of a petroleum contract that the Kenyan government and three Gulf businesses agreed upon in March.To give dealers and importers time to manage the burden of fluctuating foreign exchange rates, the contract payment was postponed until September.

The Saudi Arabian oil contract will pay Saudi Aramco, the Emirates National Oil Company Group (ENOC) of Dubai, and the Abu Dhabi National Oil Company (ADNOC).When the agreement was reached, President Ruto made a commitment that the action would assist the government in looking at options to reduce pressure on the Kenyan shilling.

The pressure on our dollars will be relieved when fuel marketers and everyone else in that industry can purchase petroleum items in Kenya shillings. In reality, the dollar will decline dramatically over the course of the next few months. The currency rate will, in my opinion, drop to 120, President Ruto stated in April.

In accordance with the oil agreement, the corporations will lend Kenya jet fuel, diesel, and super petrol.The initial oil agreement, which was due to expire in December, was extended by the Kenyan government for an additional 12 months with the governments of Saudi Arabia and the United Arab Emirates.