Government to start buying cheaper fuel from Saudi Arabia

Fuel prices increased by Ksh. 9 nationwide following an evaluation by the Energy and Petroleum Authority (EPRA).

The deal will see Saudi Armco supply NOCK with refined fuel at exclusively lower prices.

NOCK CEO Leparan ole Morintat, in an interview, said that they have already inked the MoU, and that contract negotiations are underway.

"We already signed the MoU and the next phase is negotiation the contract terms, we are waiting on them as from last Sunday," Morintat told Business Daily.

"The plan is to start trials in August, for two months and see the impact of the exclusive prices that Saudi Aramco will be giving us. Then we will fully start in October."

Under the government-to-government deal, NOCK will be importing 30 percent of the country's monthly petroleum requirements.

The imports will be used in providing strategic stocks for the country and cushion the country from a fuel shortage due to global disruptions. 

Saudi Armco, according to Morintat, will provide the products with an extended credit period while NOCK will pay within 60 and 90 days.

Saudi Aramco is a Saudi Arabian Oil Company, producing public petroleum and natural gas. 

It was one of the top-earning companies in the world as of 2020. They netted Ksh12.8 trillion ($109.385 billion) in their most recent revenue audit.

The cost of super gasoline in Nairobi has increased by 5.96 percent to Ksh.159.12 per litre as a result of the rising cost of fuel; diesel and kerosene now cost Ksh.140 and Ksh.127.94, respectively.

The fuel subsidy, which covers Ksh.25.56 for super petrol consumers, Ksh.48.19 for diesel, and Ksh.42.43 for kerosene, will be wound up by the National Treasury, increasing the price even further.

Without the cover, the price of gasoline would be Ksh. 184.68 per litre, while the prices for diesel and kerosene would be Ksh. 188.19 and Ksh. 170.37, respectively.