NAIROBI, Sept 19 (Reuters) – Kenya has extended an oil supply deal with three Gulf-based companies aimed at managing demand for dollars, the energy regulator said on Tuesday.
The East African nation reached an agreement with Saudi Aramco (2223.SE), Abu Dhabi National Oil Company (ADNOC.UL) and Emirates National Oil Company in March, moving from a call system Open tenders in which local companies bid to import oil each month. .
“There has been an extension until December 2024, so this is basically a result of the negotiations that took place to reduce freight and premiums (costs),” said Daniel Kiptoo, head of the Financial Regulatory Authority. energy and petroleum (EPRA). .
The deal helped reduce the cost of transporting oil to Kenya and the premium paid to suppliers, he said, defending the deal.
It also comes with 180-day credit terms, allowing the country to accumulate dollars for purchasing over time, rather than needing around $500 million each month to pay for imports.
However, currency traders are skeptical about its effectiveness, believing that it amounts to delaying demand.
“It’s still not lost on us that this is a stopgap measure, whichever way you look at it,” said a foreign exchange trader at a commercial bank.
The Kenyan shilling has remained under sustained pressure from the dollar, although the rate of depreciation has slowed in recent months, defying an April forecast by President William Ruto that it would strengthen significantly.
The oil import deal, in which the government is a guarantor, has also been partly blamed by government critics for contributing to rising retail gasoline prices.
A liter of petrol sells for 211 shillings ($1.43), compared to 160 shillings when Ruto took over a year ago. The government doubled the fuel tax in July.
Government officials and ruling party lawmakers defended the president against the criticism, saying the country was at the mercy of international oil prices, which have risen in recent months.
The opposition rejected this argument.
($1 = 147.0500 Kenyan shillings)
Reporting by Duncan Miriri; Additional reporting by George Obulutsa; Editing by David Evans
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