Energy and Petroleum Cabinet Secretary Opiyo Wandayi has defended Kenya’s government-to-government (G-to-G) fuel importation arrangement, insisting the programme was a necessary response to a severe foreign-currency shortage that once threatened the country’s petroleum supplies.
In a statement issued over the weekend, Wandayi said the arrangement was introduced in 2023 after Kenya faced an acute shortage of US dollars that complicated the importation of refined petroleum products and other essential commodities. He noted that when the current administration took office in September 2022, many retail stations were operating with minimal or no stocks.
At the time, oil marketing companies were required to pay for fuel imports in dollars within five days of cargo receipt. The monthly import bill for refined petroleum products stood at about US$500 million — roughly 35 per cent of Kenya’s total import bill — placing intense pressure on the Kenya shilling as companies scrambled for foreign currency from multiple banks.
To address the crisis, the government signed Master Framework Agreements on March 10, 2023, with Aramco Trading Fujairah FZE, ADNOC Global Trading Ltd and Emirates National Oil Company (ENOC). The deals provided for the supply of refined petroleum products on 180-day credit terms, allowing Kenya to ease immediate demand for dollars and rebuild foreign-exchange reserves.
Wandayi said the freight and premium rates under the arrangement have been renegotiated downward over time. At the start, premiums stood at US$97.50 per metric tonne for Super Petrol, US$118 for Diesel and US$114.25 for Jet A1. These were reduced in September 2023 and further cut in March 2025 to US$84 for Super Petrol, US$78 for Diesel and US$97 for Jet A1. The revised rates have remained fixed even during periods of international market volatility, including spikes that saw spot-market offers reach as high as US$400 per metric tonne amid Middle East tensions.
Under the framework, petroleum products for the local market are paid for in Kenya shillings and backed by 180-day letters of credit. The number of banks issuing these letters has expanded from KCB to include MCB, I&M Bank, DTB, Stanbic, UBA and Equity Bank.
“The G-to-G arrangement underpins the payment for refined petroleum products for the local market in Kenya shillings backed by a 180-day Letter of Credit. As a result, the country’s forex reserves have been preserved and significantly built,” Wandayi stated.
He added that the programme has secured consistent fuel supplies by working with major international refiners and traders with geographic proximity to Kenya. The Cabinet Secretary described the arrangement as a locally driven solution to the foreign-exchange and supply challenges of 2022 and said the government would continue strengthening the Northern Corridor as a key route for petroleum supplies to East Africa and the wider Great Lakes region.
Wandayi’s remarks come amid renewed public and media scrutiny of the G-to-G framework.Energy and Petroleum Cabinet Secretary Opiyo Wandayi has defended Kenya’s government-to-government (G-to-G) fuel importation arrangement. He said it was introduced in 2023 to tackle severe US dollar shortages that threatened refined petroleum imports and other essential goods after the country faced a foreign-currency crisis in 2022.
Oil marketing companies previously had to pay for fuel imports in dollars within about five days, putting heavy pressure on the Kenya shilling (the monthly petroleum import bill was roughly US$500 million). On 10 March 2023 the government signed Master Framework Agreements with Aramco Trading Fujairah FZE, ADNOC Global Trading Ltd and Emirates National Oil Company (ENOC) for supply on 180-day credit terms.
Freight and premium rates were later renegotiated downward, reaching US$84 per metric tonne for Super Petrol, US$78 for Diesel and US$97 for Jet A1 by March 2025. These fixed premiums held even when spot-market offers rose as high as US$400/MT during Middle East tensions.
Under the deal, local-market fuel is paid for in Kenya shillings and backed by 180-day letters of credit. The number of banks issuing these letters has grown from KCB to include MCB, I&M Bank, DTB, Stanbic, UBA and Equity Bank. Wandayi said the arrangement has helped preserve foreign-exchange reserves, stabilise the shilling, and secure continuous petroleum supply by working with major international refiners close to Kenya. He described it as a home-grown response to the earlier forex and supply crisis and noted ongoing efforts to strengthen the Northern Corridor as a regional petroleum route.
