Oil marketing companies now rubbish Raila’s claims on Gov’t-to-Gov’t oil deal

Three companies accused of irregularities in the government-to-government oil deal by opposition leader Raila Odinga have issued a joint statement dismissing allegations that they are being used to inflate the prices of fuel in the country.

In the joint statement, Gulf Energy, Galana Energies and Oryx Energies refuted claims that there was no MoU signed in the G-to-G oil deal.

“There is an MoU between the government of Kenya and the governments of the IOCs, also supported by long-existing bilateral trade relations between Kenya and these countries,” stated the companies.

Mr. Odinga had also accused the companies of inflating fuel prices, and in their response, the three firms affirm that the cost of fuel is determined by international factors and that there was a rise in global fuel prices that coincided with the start of the G-to-G supply.

“The local cost of fuel is determined by international oil prices, the prevailing forex rate and applicable taxes. The global oil prices have been steadily rising due to the global post-COVID recovery in demand, and certainly more with the geopolitical challenges over the last 18 months,” read the statement.

“It is noteworthy that the world prices have been rising from Quarter 2 of 2023 which coincided with the start of the G-to-G supply.”

The three companies further dismissed claims that they have been exempted from paying the 30 per cent corporate tax, saying just like all other organisations, they have been paying all relevant taxes.

“There is no exemption from payment of any tax (no tax exemption has been sought by the nominated OMCs, nor has the GoK offered any). The Kenyan companies involved in the G-to-G supply pay their corporate taxes, and all other taxes like any other organization,” added the companies.

Mr. Odinga on Thursday labelled Kenya Kwanza's G2G deal a major scam that was driving up the cost of fuel while benefiting shadowy government officials.

President William Ruto has since hit back at the Azimio la Umoja One Kenya frontman saying the State does not act as a broker in the oil procurement business, but rather an underwriter responsible for ensuring oil transactions occur without any hitches.

"The purpose of the government is twofold; to guarantee international oil companies that they can extend products to Kenya for six months and that after six months we are going to pay and we have kept our part of the bargain," he said.

"We also gave them the guarantee that dollars will be available to them and we have made sure that is the case. The rest is private business. The State is not a broker or an in-between so the entire process is private sector-led."