Kenya extends oil import agreement with 3 Gulf-based companies
Date
12/18/2024 2:16:01 AM
(MENAFN) Kenya announced yesterday that it has extended its oil import agreement with three Gulf-based companies, which has provided some relief for the Kenyan shilling. This move is seen as a positive step to ease the financial strain caused by the country's need for foreign currency to purchase oil.
The agreement, initially signed in March 2023 with Saudi Aramco, Abu Dhabi National Oil Company (ADNOC), and Emirates National Oil Company (ENOC), was first extended in September 2023 to last until December 2024. However, the Kenyan government confirmed in a recent statement that it had agreed to further extend the deal, though the length of the new extension was not disclosed.
These imports from the three Gulf companies have helped Kenya move away from its previous system of open tenders, where local companies would bid to import oil on a monthly basis. Under the current deal, Kenya benefits from a 180-day payment period, which allows the country to accumulate dollars gradually to pay for its oil imports, rather than requiring the immediate allocation of approximately USD500 million per month.
The government highlighted that this arrangement has significantly reduced the monthly demand for dollars, helping to stabilize the exchange rate between the Kenyan shilling and the US dollar. Additionally, the deal has contributed to lowering fuel prices, which has been a positive outcome for consumers in the country.
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