Kenya’s government has defended its Government-to-Government (G-to-G) fuel importation arrangement, saying the programme was introduced in response to a severe shortage of US dollars that threatened fuel supplies and the wider economy.
Energy and Petroleum Cabinet Secretary Opiyo Wandayi said the arrangement, introduced in 2023, allowed international oil suppliers to provide petroleum products on credit terms of up to 180 days. The government says this reduced the immediate demand for foreign currency and helped protect Kenya’s fuel supply.
According to Wandayi, petroleum imports previously required payment in US dollars within about five days of cargo arriving. The fuel import bill was estimated at $500 million, equivalent to about 35% of Kenya’s total import bill at the time.
The government’s defence follows fresh scrutiny after Ugandan President Yoweri Museveni said Uganda had previously been purchasing petroleum products through Kenyan intermediaries at higher premiums. Museveni cited a reduction in the diesel premium from $118 to $83 per metric tonne under Uganda’s newer supply arrangement with Vitol and the Uganda National Oil Company.
Wandayi explained that the international oil companies involved in the Kenyan arrangement appointed licensed local oil marketing companies to manage domestic logistics and distribution. He said the government provided companies for vetting, while the final selection of counterparties was made by the international suppliers.
The ministry also says freight rates under the arrangement have fallen since 2023. For diesel, for example, the rate cited by Wandayi declined from $118 per metric tonne initially to $78 in March 2025, while the petrol rate fell from $97.50 to $84.
The controversy has therefore shifted attention toward the role of intermediaries, import costs, freight charges and the benefits of the 180-day credit model, with the government maintaining that the arrangement was primarily designed to protect fuel availability and ease pressure on Kenya’s foreign-exchange reserves.
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