Raila terms Ruto's G-to-G oil deal grand scam, calls for cancellation

Azimio la Umoja Raila Odinga addresing the media on oil deal at Jaramogi Oginga Odinga Foundation in Nairobi. [Emmanuel Wanson, Standard]

Azimio leader Raila Odinga, has called the government-to-government oil deal initiated by President William Ruto a grand scam, and claimed it has plunged the nation into turmoil.

Speaking in Nairobi on Thursday, November 16, Raila highlighted what he claimed were discrepancies, failures and corruption associated with the oil deal and called for its immediate cancellation.

“Five facts are undeniable, there was no G-to-G. Kenya did not sign any contract with Saudi Arabia or the United Arabs Emirates (UAE). Only the Ministry of Energy and Petroleum signed a deal with state-owned petroleum companies in the Middle East. Why Ruto chose to characterise the deal as a G-to-G is the first red flag that points to mischief in this deal,” said Raila.

The Azimio leader claimed the deal failed to live up to its promises on multiple fronts. Despite Ruto’s assurances of reduced fuel costs, the price of the commodity has drastically shot up.

However, Kenya Kwanza legislators led by National Assembly Majority Leader Kimani Ichungwa have dismissed Azimio leader Raila Odingas allegations that the government-to-government oil deal was riddled with corruption

Ichungwah said that is mere “street propaganda” and challenged Raila to produce evidence to substantiate his claims

“Odinga asserted himself that There’s a signed contract between Kenya and the three state owned petroleum agencies with Saudi Arabia. Then what is it if it’s not G to G?” posed Ichungwa.

On the fluctuating dollar exchange over the past six months, the Majority Leader challenged Raila to tell Kenyans the factors that are influencing the same and blamed the situation on the handshake between the ODM leader and former President Uhuru Kenyatta.

“Odinga is aware they spent 2 billion USD to prop up our Shilling in order to persuade Kenyans to vote for them. The deal was orchestrated by one commercial bank depleting our reserves,” he said.

Raila went on to claim the cost of oil in Kenya has not decreased as pledged, and the Kenyan shilling has continued to depreciate against the Dollar following the deal.

“The deal has not addressed any of the problems Ruto said it would. When Ruto initiated this deal, the US-dollar to Kenya-shilling exchange rate was Sh132. Today, six months later, it is Sh159 to the dollar,” said Raila.

“The cost of fuel shot up significantly after the deal. Why have things moved from bad to worse since the deal? Well, the deal was a scam for which we now demand full disclosure and full accountability,” he added.

The Azimio leader also alleged corporate tax evasion by some of the companies involved in the deal.

He stressed that President Ruto’s portrayal of the deal as phenomenal was aimed at shielding these companies from corporate taxes, effectively placing the burden of the unpaid taxes on Kenyan consumers at the pump.

While announcing the deal, President Ruto said: “They have managed to put together a program that has taken us away from looking for $500 million every month to buy our fuel needs, which was slowly snowballing into a crisis. Today, we can buy fuel in Kenya shillings, something many people never thought would be possible.”

“In fact, in the next one month or so, you will see the exchange rate coming down in a very phenomenal way. In my estimation, in the next couple of months, the exchange rate will come below Sh120, may be Sh115, you never know,” Ruto added.

Raila hit back: “Kenya is losing billions of shillings in taxes because the three companies picked to spearhead this deal do not pay the 30 per cent corporate tax. Shielding the three companies from this tax is the reason Ruto told Kenyans that it was G-to-G.”

He further raised concerns over the selection process that led to the appointment of companies accusing some of manipulating the system, and inflating prices arbitrarily without facing any consequences from the government.

The former prime minister also accused the Ministry of Energy of changing the billing month in its records to allow the oil firms to quote higher prices.

“For instance, cargo that was bought in July when the price was low is allowed to quote higher August prices and pass the burden to the consumer,” he said.

The Azimio leader further alleged that the deal is marred with corruption orchestrated by the Ministry of Energy and Petroleum and the three petroleum companies.

“It is shrouded in deep secrecy. To date, only two documents have been made public: the Master Framework Agreement with petroleum trading entities and the Open Tender System modified agreement with marketers,” said Raila.

“The Supplier Purchase Agreement between the Middle East Oil firms and their hand-picked distributors in Kenya has never been seen. We challenge Ruto to publish this document,” he added

The Azimio leader claimed that the deal was driving neighbouring landlocked countries to explore alternative oil routes due to the exorbitant expenses tied to Kenya’s pipeline.

Uganda’s Parliament recently ratified a Bill granting powers to Uganda National Oil Company (UNOC) for procurement and distribution of oil within the country.

Raila demanded the immediate cancellation of the deal and return to the open tender system, and called for thorough investigations by the Ethics and Anti-Corruption Commission (EACC) and the Directorate of Criminal Investigation (DCI).

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