Kenya’s Government Spokesperson Isaac Mwaura has clarified the reasons behind the nation’s adoption of the Government-to-Government (G-to-G) fuel import approach, connecting the decision to the significant fuel crisis that impacted Kenya in 2022.
During a statement delivered at Harambee Annex in Nairobi on Thursday, Mwaura indicated that the policy transition was directly caused by the extensive fuel shortages, fluctuating pump prices, and a critical shortage of US dollars that had interfered with import operations during that period.
Mwaura explained that the prior spot purchasing method had left Kenya vulnerable to manipulation by certain market participants, leading to artificial scarcity and heightened demand for foreign exchange.
Mwaura stated, “The government implemented the G-to-G fuel import framework as an immediate response to the challenges inherited in 2022.”
He added, “During that period, Kenya was facing fuel scarcities, price instability, and a substantial deficiency in US dollars required for importation. The spot purchasing methodology enabled manipulation, generating artificial shortages and escalating foreign exchange requirements.”
Within the G-to-G framework, Kenya obtains fuel directly from leading global oil producers such as Saudi Aramco, Abu Dhabi National Oil Company (ADNOC), and Emirates National Oil Company (ENOC), effectively removing middlemen from the supply chain.
According to Mwaura, this approach allows the government to establish pricing agreements beforehand and organize imports systematically, guaranteeing a more consistent and foreseeable fuel distribution.
He noted, “This strategy permits the government to settle pricing terms ahead of time and coordinate imports in an organized fashion, ultimately delivering stability, reliability, and improved planning to Kenya’s fuel distribution system.”
Mwaura observed that since its implementation, the G-to-G program has provided a consistent and dependable fuel supply throughout the nation, prompting other countries to consider Kenya’s approach as a reference standard.
The spokesperson further mentioned that the new system has eradicated artificial scarcities and lessened demand on the US dollar by terminating speculative spot acquisitions that had previously overloaded the foreign exchange market.
He stated, “These enhancements have resulted in a more robust Kenyan shilling, reduced inflation, and higher foreign exchange reserves.”
Consequently, assertions that the G-to-G arrangement has not delivered advantages to Kenyan citizens are misleading.
The government representative also addressed concerns regarding the contentious MV Paloma fuel delivery. He clarified that authorities intentionally excluded this cargo from pricing computations to protect consumers from increased expenses.
Mwaura explained, “Within the G-to-G structure, fuel prices have typically been obtained at substantially reduced rates. The MV Paloma delivery was an exceptional case and was omitted from pricing calculations to safeguard consumers.”
In addition to explaining the transition to G-to-G imports, Mwaura outlined several measures the administration has implemented to protect Kenyans from escalating global fuel costs.
He mentioned that the government has intervened to prevent diesel prices from surpassing Sh230 per liter, despite ongoing pressures in international oil markets.
He stated, “We have taken action to guarantee that diesel prices do not exceed Sh230 per liter.”
Among the primary interventions, Mwaura referenced the allocation of a Sh6.2 billion stabilization fund through the Petroleum Development Levy to offset some of the cost increases.
He also highlighted the recent reduction of Value Added Tax (VAT) on petroleum products from 16 percent to 8 percent, which has directly decreased pump prices for both gasoline and diesel.
He added, “Furthermore, the Government has temporarily reduced VAT from 16 percent to 8 percent, a change that has directly decreased pump prices.”
Mwaura additionally confirmed that a fuel subsidy continues to be applied to temper prices, while the government balances the necessity of preserving essential revenue sources.
He justified the continued implementation of fuel levies, emphasizing their vital role in funding infrastructure initiatives, especially road construction, which subsequently diminishes long-term transportation expenses.
He stated, “Although fuel levies continue, they are essential for financing infrastructure advancement, including road projects that eventually decrease transportation expenses and foster economic growth.”
The G-to-G fuel import model has formed a fundamental component of the government’s strategy to stabilize the energy sector, particularly during a period when global oil prices and exchange rate fluctuations continue to affect local pump prices.
Mwaura asserted that the policy change has enabled Kenya to move from an era of supply unpredictability to a more stable and consistent fuel management system.
He repeated that the administration remains dedicated to protecting consumers from external disruptions while guaranteeing sustainable management of the nation’s fuel distribution network.
Mwaura stated, “The Government remains dedicated to safeguarding consumers while maintaining stability in fuel supply.”
With global energy markets continuing to be unpredictable, the success of the G-to-G model and the efficacy of current interventions are expected to face intensive examination from both consumers and industry participants.