CS Chirchir Sheds Light on Surging Fuel Prices Amidst Ruto’s Oil Deal
Energy Cabinet Secretary Davis Chirchir pleaded with Kenyans on Tuesday, June 13, to give the government additional time to allow international oil companies to accept Kenyan shillings for the purchase of petroleum.
Speaking to the press following a meeting with the Parliamentary Committee on Energy, the CS remarked that some Saudi oil dealers remained skeptical of the country’s decision to abandon dollars for Kenyan shillings in international transactions.
Some believed that it would affect their businesses, he noted.
However, Chirchir reported that after purchasing petroleum under the agreement for two months, a significant number of investors had begun to embrace the concept.
According to the CS, it would be easier to reduce fuel prices in the country as more investors adopted the new purchase deals.
“We’ve been using the deal for two months, and the international oil companies that sell to us have begun to realize that the payment method’s risk is much lower than they previously believed,” he said.
The only way to reduce fuel prices at the time, according to Chirchir, was to renegotiate the percentage paid as insurance cost at the time of purchase.
“A risk-taker must ensure the purchase, which costs approximately 0.7% of the total price. We will have to renegotiate this percentage and attempt to get it reduced to zero percent to save Ksh1 per liter on gasoline,” he explained.
ALSO READ: Kenya’s Bold Step: Pillars Along Tanzanian Border to Safeguard Against Crisis
Two days before the monthly fuel review by the Energy and Petroleum Regulatory Authority (EPRA), the parliamentary committee met.
The purpose of the meeting was to examine internally generated revenue and explore viable methods to stem the rising prices that continued to burden consumers across the nation.
Since January 2023, fuel prices have increased despite the government’s decision to import fuel products using the Kenyan Shilling instead of the United States Dollar.
Experts explained that the purchase would result in a decrease in the price of the commodity at the pump due to the government’s need to convert the amount into dollars to meet international market standards.
Inarticulate Energy Officials
The Energy and Petroleum Regulation Authority (EPRA) was unable to explain the benefits of the Government-to-Government fuel deal to Kenyan citizens on June 6.
The National Assembly Public Investments Committee on Commercial Affairs and Energy (PICCAE) questioned why the deal intended to protect Kenyans from high fuel prices failed to produce results.
In its report following the meeting, the committee stated, “Representatives of EPRA who appeared before the committee expressed their inability to adequately address the inquiries regarding the matter.”
Ruto chose three foreign companies, including Amarco, Abu Dhabi National Oil Corporation Global Trading (ADNOC), and National Oil Company (NOC), to supply Kenya with fuel.
On Wednesday, June 14, EPRA will announce fuel prices for June and July.
CS Chirchir Sheds Light on Surging Fuel Prices Amidst Ruto’s Oil Deal
HEY READER. PLEASE SUPPORT THIS SITE BY CLICKING ADS. DON’T FORGET TO HIT THE NOTIFICATION BELL FOR MORE UPDATES AROUND THE GLOBE.
