5 EAC Countries Oppose Ruto’s G-to-G Deal

5 EAC Countries Oppose Ruto’s G-to-G Deal

5 EAC Countries Oppose Ruto’s G-to-G Deal

President William Ruto’s government-to-government oil contract with the Saudi Arabian government was deemed vital,  according to the Office of the Government Spokesperson. In a comprehensive seven-page document released on Thursday, which exonerated the state from the  contentious Ksh17 billion agreement, Spokesman Isaac Mwaura accused the  administration of former President Uhuru Kenyatta of leaving an economy in  danger of collapsing.

He argued that when Ruto took over the reins in September 2022, some petrol outlets were already facing fuel shortages caused by the deficit of dollars to pay for consignments, leaving Oil Marketing Companies (OMCs) exposed.Ruto, as a result, was forced to enter into a deal utilising the local currency and extending the payment period from five days to six months.

“All this persisted until the Kenya Kwanza Government came to power in an effort to prevent the economy from the brink of shutdown over the paralysis in the petroleum supply chain in the country, the new administration had to look for a quick and viable solution resulting to the government-to-government mode of supply, which is consistent with Kenya Kwanza manifesto pledge of using the value chain model rather than the supply chain, in order to cushion the hustlers from cartel-like behavior in the pricing and supply of basic and essential commodities,” read the statement in part.

At the beginning of November, the Ugandan Government accused middlemen in Kenya of frustrating its efforts to import cheap fuel.

After two weeks, the Petroleum Supply Amendment Bill 2023 was enacted by the  Parliament, relieving the government of the need to rely on intermediaries who  charge high prices for fuel. The Uganda National Oil Company (UNOC) is now able to import oil straight from  refineries according to the Bill. The Democratic Republic of the Congo, South Sudan, Burundi, and Rwanda all  stated on Tuesday that they would prefer not to import fuel through the Port of  Mombasa. The area has coordinated infrastructure initiatives to control our supremacy and is  not dozing off. Kenya will lose severely in the long run, according to options it has,” a CEO with  headquarters in Kenya told the BBC.

Tanzania Fuel Prices

Mwaura further explained that the lower fuel price announced in Tanzania differed from that of Kenya due to differences in computation styles between the two countries.

In Tanzania, a litre of petrol costs Tsh3,274 (Ksh198.42) compared to Kenya’s Ksh203.47.

“Kenyans have been comparing prices in Kenya with regional prices thinking that the government inflates our pump prices but this is to the contrary,” explained the statement.

For instance, variations in pricing approaches account for the discrepancy in  price computation between Tanzania and Kenya. Tanzania is now enjoying a brief price advantage as a result of the various pricing  approaches.” The Petroleum Pricing Regulations of 2022 mandate that the volume and cost of  cargo be taken into account when setting prices, and this is how the Energy  Petroleum Regulatory Authority (EPRA) sets prices in Kenya.

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