Kenya Signs a Deal to Import Cheaper Fuel from Saudi Arabia

The imports will be used in providing strategic stocks for the country and cushion the country from a fuel shortage due to global disruptions. 

The National Oil Corporation of Kenya (NOCK) will from August start importing cheap fuel from Saudi Arabia in a move aimed at lowering pump prices.

Under the government-to-government deal, Saudi Armco will supply NOCK with refined fuel at exclusively lower prices than the global rates, according to Business Daily.

NOCK CEO Leparan ole Morintat told Business Daily that they have already signed a Memorandum of Understanding (MoU), and contract negotiations are ongoing.

"We already signed the MoU and the next phase is negotiating the contract terms, we are waiting on them as from last Sunday…The plan is to start trials in August, for two months and see the impact of the exclusive prices that Saudi Aramco will be giving us. Then we will fully start in October," Morintat said.

The deal will see NOCK import 30 percent of the country's monthly petroleum requirements, a move that is expected to lower fuel prices and ease the burden on consumers.

Morintat indicated that Saudi Armco will finance the shipments or provide the products with an extended credit period while NOCK will pay within two and three months.

Saudi Aramco, a Saudi Arabian public petroleum and natural gas company based in Dhahran, was among the largest companies in the world by revenue as of 2020. The company earned $109.385 billion in its most recent revenue audit.

The cost of super petrol in Nairobi increased by 5.96 percent this month to Sh159.12 per liter while the cost of diesel and kerosene rose to Sh140 and Sh127.94 per liter respectively.

The National Treasury recently announced plans to end a fuel subsidy that covers Sh25.56 per liter for super petrol consumers, Sh48.19 for diesel, and Sh42.43 for kerosene. Without the cover, the price of gasoline would be Sh184.68 per liter, Sh188.19 for diesel and Sh170.37 for kerosene.