Saudi Arabian oil and gas company Saudi Aramco; state-owned Abu Dhabi National Oil Company (ADNOC); and global energy group, Emirates National Oil Company (ENOC) have won bids to supply petroleum products to Kenya.
The supply contracts are expected to last for approximately 270 days, while payments will remain deferred for a minimum of 180 days. The supply of petroleum products has been given an extended credit period of six months to curb demand for U.S. dollars, which has weakened the local Kenyan Shilling.
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This longer payment period will remove the need for importers to spend hundreds of millions of dollars per month.
“I want to assure those in Kenya who were facing challenges of access to dollars that we have taken steps to ensure dollar availability in the next couple of weeks,” Kenya’s President William Ruto stated, adding, “I want to assure our fuel companies that they will now be able to pay for their fuel in Kenyan Shillings; they will no longer have to look for dollars every month because we as a government have done what we must do to ensure that we ease the burden of people who want to realize their returns in dollars.”
Expected to start importing between April and May 2023, the firms will nominate local oil marketers to oversee the importation and revenue collection, which will be paid following the expiry of the six-month credit period.