Petroleum Outlets Association of Kenya (POAK) on Saturday, June 17, explained how President William Ruto's decision to adopt a government-to-government fuel importation deal cost Kenya a multimillion venture.



In a statement, the professional formed to bring together all operators in the petroleum industry noted that other East African countries had started importing their fuel through a port in Dar-es-Salaam, Tanzania, after the government started importing fuel from Saudi Arabia.


They argued that the decision had made President Samia Suluhu Hassan position Tanzania as an export hub, thus gaining trust from other fuel dealers in other East African countries who solely used the Port of Mombasa to import their fuel.
According to data from the taxman, Kenya gained close to Ksh400 billion in 2021 from fuel transiting to other East African Countries such as Uganda, Tanzania, Rwanda, Burundi, and South Sudan.

"We have lost the transit market to Dar el Salaam," Petroleum Outlets Association of Kenya noted.

To avert losses, Energy and Petroleum Cabinet Secretary Davis Chirchir announced plans to build more ships to allow oil exportation to Uganda through Lake Victoria.


In the new plan, Chirchir noted that fuel transported to Uganda will be loaded onto trucks to Rwanda, South Sudan, Burundi and the Democratic Republic of Congo.

"We have embarked on building three more ships so that the jetty can be doing shipments daily," Chirchir stated.

Besides losing a multibillion deal to Tanzania, the dealers raised concerns that Ruto's deal to acquire fuel from Saudi Arabia had failed to solve the dollar issue.

According to the Central Bank weekly bulletin released on Friday, June 16, the Kenya Shilling remained relatively stable against major international and regional currencies. It exchanged at Ksh139.71 per US dollar on Thursday, June 15, compared to Ksh139.11 per US dollar on Thursday, June 8.


Ruto had announced that the deal will bring down the dollar exchange rate to Ksh120.

Further, the fuel dealers noted that fuel was retailing at higher rates in Kenya than in other East African Countries.

According to fuel prices announced by Energy and Petroleum Regulatory Authority (EPRA) on Wednesday, June 14, a litre of super petrol was reduced by Ksh0.66 and will retail at Ksh182.04.

Diesel was reduced by Ksh1.12 to retail at KshKsh167.28 while kerosene was increased by Ksh0.35 to hit Ksh161.48 per litre.