Monday, November 4, 2024 – The International Monetary Fund
(IMF) has raised concerns over President William Ruto’s
government-to-government (G2G) oil importation deal with the Gulf region and
has asked for clarity over the matter.
In a statement, IMF asked Ruto to issue a way forward
on the G2G deal, whose future remains unclear.
This comes even as Ruto’s government had
stated that it would exit the oil importation deal on December 31, 2024, after
it failed its objective.
The government had entered an oil agreement deal with four Gulf companies in an attempt to address the scarcity of US dollars
that was prevalent then intending to stabilize the shilling
However, the government took a U-turn on its
initial move after the G2G deal encountered a myriad of challenges. Key among
these challenges was the distortions caused to the forex market thus
necessitating the termination.
The IMF’s concern stems from the fact that
Kenya’s oil import industry is set to be a responsibility of the private sector
in the long run but so far no communication on the timeline of this development
has been issued by the government.
“The authorities envisage the private sector
eventually taking over the entire operation of the scheme but have not
committed on the timeline,” the report stated in part.
The IMF report also flagged that imported
volumes of oil throughout the course of the G2G deal had fallen short of the
contracted amounts due to a decline in fuel consumption both in the domestic
and re-export markets.
This was further compounded by a decision from
Uganda, an important destination for oil re-exports to source its fuel imports
directly.
The Kenyan DAILY POST
