By Dennis Rasto
The Government is easing pressure on the country’s Foreign Exchange (Forex) Reserve by implementing a raft of measures that will ensure dollar availability.
Energy and Petroleum Cabinet Secretary Mr Davis Chirchir said the Government to Government fuel importation deal the State has entered into with three international oil firms will ease the dollar shortage that has been crippling the economy for the last one year.
Mr Chirchir noted that petroleum products account for about 35 percent of the total Forex requirements, adding that under the deal firms will nominate local oil marketers that will oversee the importation and collection of money that will then be paid after the expiry of six-month credit period.
He added that the credit period, in addition to oil marketers paying for products using the shilling as opposed to dollars as has been the case, are expected to reduce demand for the US dollar and reduce pressure on the foreign exchange reserves that are at their lowest levels in over a decade.“The credit period is reducing pressure on the shilling and ensuring dollars are available for the rest of the market. Dollar unavailability has been a big challenge aggravated by devaluation and sliding of the Kenya shilling,” added the Cabinet Secretary.
Speaking when he commissioned a new bottom Tanker fuelling system at Kenya Pipeline Company in Nakuru Mr Chirchir said the situation of the tightening of the monetary policy by the US government due to post-Covid-19 inflation that hit the all high 9 percent had contributed to the dollar shortage.
Kenya has selected Saudi Arabia Oil Company (Saudi Aramco), Abu Dhabi National Oil Company (Adnoc) and the Emirates National Oil Company (Enoc) to supply petroleum products on credit for nine months (270 days), with an extended credit period of six months (180 days).
Saudi Aramco will supply two cargoes of diesel every month, Adnoc another two cargoes of diesel and one cargo of dual-purpose kerosene, while Enoc will bring in three cargoes of super petrol per month.