How The G-to-G Petroleum Framework Eased US Dollar Scarcity And Stabilized Kenya’s Economy

The Government of Kenya has issued a clarification defending the Government-to-Government (G-to-G) importation framework for refined petroleum products, citing its success in stabilizing national supply and easing US Dollar liquidity constraints.

Upon taking office in September 2022, President William Ruto’s administration faced severe fuel shortages alongside an acute US Dollar scarcity. At the time, monthly oil imports accounted for $500 million—roughly 35 percent of Kenya’s total import bill, payable within five days. This triggered aggressive forex competition among Oil Marketing Companies (OMCs) and rapid currency depreciation.

To avert economic collapse, the government entered Master Framework Agreements on March 10, 2023, with Aramco, ADNOC, and ENOC. The deal established a 180-day extended credit period, allowing Kenya to preserve over $500 million monthly in foreign exchange reserves, reduce currency speculation, and allow local payments in Kenya Shillings backed by letters of credit across multiple domestic banks.

Addressing counterparty selection, the statement explained that the International Oil Companies (IOCs) were permitted under national licensing rules to nominate local counterparties to handle domestic logistics. The IOCs selected Gulf Energy, Galana Energies, Oryx Energies, and later expanded the list to include One Petroleum, Asharami Synergy, and BE Energy following successful de-risking of the transaction.

Furthermore, renegotiations significantly lowered freight and premium costs over time. Super Petrol premiums dropped from $97.50 per metric ton initially to $84 by March 2025, while Diesel fell from $118 to $78, remaining fixed despite global market spikes reaching $400 per metric ton during Middle East crises. The government reiterated that the G-to-G model has secured long-term energy stability and reinforced Kenya’s position as a regional logistics hub.