Saturday November 18, 2023 – Oil Marketing Companies (OMCs) have explained why Kenyans are still paying high for fuel despite the government-to-government deal between Kenya and Saudi Arabia.
Responding to queries raised by former Prime Minister Raila Odinga over the deal, the oil marketers attributed the current fuel prices, which remain at over Ksh 200, to international factors such as Dollar dominance.
The marketers asserted that the Dollar has been gaining dominance against the Shilling since President William Ruto’s administration announced the deal in March.
It was also explained that the companies were still required to source for the Dollar for the purchases.
However, the marketers stated that the acquisition of the Dollar was being done in a structured manner as stipulated in the G-to-G deal.
“The local cost of fuel is determined by international oil prices, the prevailing forex rate and applicable taxes. Data shows global oil prices have been steadily rising due to the global post-COVID recovery in demand and certainly more with the geopolitical challenges over the last 18 months.
“It is noteworthy that world prices have been rising since Quarter 2 of 2023 which coincided with the start of the G-to-G supply,” read the statement in part.
On the other hand, the marketers maintained that the oil deal helped to stabilise the Kenyan Shilling despite hitting the Ksh 150 mark against the Dollar in the last two months.
Currently, the Dollar is exchanging at Ksh 152 compared to Ksh132 when the oil deal was struck in March.
“This depreciation would have been worse were it not for the intervention of G-to-G. It is a fact that during the period of scarcity of forex before the G-to-G implementation, there existed a parallel market that was selling Dollars at rates much higher than the rate published by the Central Bank,” read the statement in part.
The statement by the marketers came a day after Ruto addressed concerns raised by Raila, maintaining that the oil deal was transparent and above board.
The Kenyan DAILY POST