Parliament seeks probe into Ruto's UAE oil deal amid surging fuel prices

Public Investments Committee on Commercial Affairs and Energy chairman David Pkosing at parliament in Nairobi on June 6, 2023. [Elvis Ogina, Standard]

Parliament is now calling for a special audit into President William Ruto’s government-to-government oil deal with the United Arab Emirates (UAE) amid skyrocketing fuel prices.

In March, the Ruto administration entered into an agreement with UAE that allowed Kenya to import fuel on credit in a move aimed at easing pressure on dollar demand. Three firms - Amarco, Abu Dhabi National Oil Corporation Global Trading and National Oil Company - were then chosen to supply petroleum products to Kenyans.

Under the deal, the nominated firms get to import the oil and other marketers buy from them for supply to the local market and to neighbouring countries.

MPs have however raised a red flag, saying the deal had failed to address the challenge of increasing oil prices.

The Pokot South MP David Pkosing-led energy committee is now concerned that despite the deal, touted as the silver bullet in efforts to lower fuel prices, has achieved nothing.

The legislators are now calling on the office of the Auditor General to commence a probe into the deal and establish its viability in cushioning Kenyans from the high fuel prices.

“We are seeking to understand what the deal was meant to achieve if not lowering the price of fuel that continues to go up. We will write to the Auditor General to conduct a special audit of the government-to-government deal,” said Pkosing during a meeting with the Energy and Petroleum Regulatory Authority (EPRA) board.

President William Ruto during the 22nd Comesa Summit of Heads of State and Government held in Lusaka, Zambia on June 8, 2023. [PCS]

The committee had also criticized the deal saying crucial details such as how the recruitment exercise to settle on the three oil companies was conducted, and when Kenyans should expect to enjoy lowered prices were not provided.

EPRA board secretary Mueni Mutula however passed the buck to EPRA’s management which she said handled the procurement process. She was accompanied by the board chair and former judge Jactone Ojwang.

 “The team is not well versed in this matter and might not be able to address the concerns raised by members. We do not have the information as the management handles procurement,” stated Mueni.

The Kenya-UAE oil deal has also attracted opposition from Kenyan oil markers who have since moved to court arguing that the government’s move to pick a local oil marketer breaches the Open Tender System where marketers competitively bid for the tender.

The oil firms also claim that there was no public participation and stakeholder consultation before the gazettement of the Petroleum (Importation) Regulations, 2022, which is a breach of the constitution.

The government had in April predicted a drop in fuel prices but the fears are now abounding that a litre of petrol might in the coming weeks hit Sh200 if new tax proposals by the National Treasury sail through.

Treasury has in the Finance Bill 2023 proposed an increase on the value-added tax (VAT) levied on petroleum products to the standard rate of 16 per cent from the current rate of eight per cent.