Clear uncertainty over UAE fuel imports deal
Friday March 03 2023
Kenya is pursuing a government-to-government deal to start importing fuel on the credit of up to one year from the United Arab Emirates to ease pressure on dollar demand amid uncertainty over its impact on local pump prices.
The imports are expected to ease a crisis in the foreign exchange market given that oil shipments account for 28 percent of Kenya’s monthly imports.
Understandably, the currency crisis has forced the country to find ways to deal with pressure on the forex that has wider implications for the economy.
But it is concerning that officials remain guarded on important details of the deal. For instance, it is important for the public to know how the shipment will affect fuel prices in Kenya since a credit line could wipe out the benefits of buying diesel and petrol in large quantities.
It is also important for players in the market to be informed of how this will affect their decisions when placing their next orders.
But the most fundamental question is how the government will ensure it does not jeopardise the current open tender process that has boosted transparency in pricing and stability in fuel imports.