NAIROBI (Reuters) – Kenya has further extended an oil supply deal with three Gulf firms that has helped to relieve pressure on its shilling currency, it said on Tuesday.
The deal with Saudi Aramco, Abu Dhabi National Oil Company and Emirates National Oil Company was initially agreed in March last year and was extended in September 2023 until this month.
The Cabinet said in a statement outlining decisions made in its latest meeting that it had approved another extension, but did not say for how long it would run.
Supplies from the three firms allowed Kenya to switch from the previous petroleum procurement system that relied on an open tender in which local companies would bid to import oil every month.
The arrangement with the Gulf firms comes with 180-day credit terms, allowing the country to build up dollars for the purchase over time rather than requiring about $500 million every month to pay for imports.
The Cabinet said in a statement: “This arrangement has eased the monthly demand for U.S. dollars for petroleum imports, stabilising the shilling-dollar exchange rate.”
The agreement had also helped reduce pump prices for consumers, it added.
(Writing by Elias Biryabarema; Editing by Jan Harvey)
