Oil Marketing Companies (OMC) have defended the framework for petroleum imports into the nation, claiming that Kenyans benefit greatly from the current setup.
Despite declining worldwide prices, opposition leader Raila Odinga said on Friday that the OMCs were to blame for the nation's growing fuel costs.
Raila further asserted that Saudi Arabia and the United Arab Emirates were not parties to a government-to-government agreement signed by Ruto's administration.
The opposition's assertion that the companies are still compelled to mobilise cash from the local market was refuted by the companies in a joint statement.
They added that instead, the local OMCs are no longer obligated to source dollars locally and can pay for petroleum in Kenya Shillings under the G-to-G system.
The companies explained why the cost of oil is still high in the nation even with the G-to-G agreement by blaming it on global issues like Dollar supremacy.
In contrast to Raila's assertions, the marketers claimed that the Dollar acquisition was being completed in a systematic manner in accordance with the terms of the G-to-G agreement.
"The local cost of fuel is determined by international oil prices, the prevailing forex rate and applicable taxes. Data shows 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,'' the marketers said.
"It is noteworthy that world prices have been rising since Quarter 2 of 2023 which coincided with the start of the G-to-G supply.''
The companies firmly defended the G-to-G agreement, claiming that it was stabilising the value of the shiling relative to the dollar.
In the previous two months, the Kenyan Shilling surpassed 150 Ksh versus the US dollar.
According to them, the dollar is currently trading at Ksh152 as opposed to Ksh132 when the oil deal was reached in March.
"This depreciation would have been worse were it not for the intervention of G-to-G. It is a fact that during the period of scarcity of forex before the G-to-G implementation, there existed a parallel market that was selling Dollars at rates much higher than the rate published by the Central Bank," read the statement in part.
President William Ruto responded to Raila's worries on Friday, saying that the oil agreement was open and honest.
According to Ruto, the government simply promised to make sure the markers had access to the Dollar and would pay for the oil shipment; it did not operate as a broker.
“The international oil companies sell fuel directly to oil marketers in Kenya. The entire process is a private sector driven," he stated.
The head of the opposition had claimed that the local companies' tendering procedures were rigged to help them avoid paying taxes.