NAIROBI, Kenya — In a new partnership aimed at stabilizing fuel supply chains and the local currency, Kenya and Malawi have signed a government-to-government (G-to-G) agreement to import refined petroleum products in bulk.
The deal was formalized following discussions between President William Ruto and Malawi’s President Lazarus Chakwera on the sidelines of the United Nations General Assembly in New York last month.
The Memorandum of Understanding (MoU), signed by Energy Cabinet Secretary Opiyo Wandayi and Malawi’s Energy Minister Ibrahim Matola, will see Kenya secure a steady supply of fuel products, a move expected to help stabilize both countries’ energy sectors.
“The MOU will remain valid for five years or until either party chooses to terminate it under the agreement’s terms,” Wandayi noted, emphasizing the role of such agreements in fortifying regional energy stability.
The G-to-G deal aligns with Kenya’s previous agreements with Gulf-based oil companies, under which local firms paid in shillings for petroleum products supplied in dollars.
This mechanism not only alleviated exchange rate pressures but also provided a buffer against fluctuating global oil prices.
The extended Gulf oil agreement, initially set to conclude in April 2023, is now extended until December 2024, reflecting Kenya’s ongoing commitment to reduce its dependence on volatile markets and protect its foreign currency reserves.
The deal was formalized following discussions between President William Ruto and Malawi’s President Lazarus Chakwera on the sidelines of the United Nations General Assembly in New York last month.
The Memorandum of Understanding (MoU), signed by Energy Cabinet Secretary Opiyo Wandayi and Malawi’s Energy Minister Ibrahim Matola, will see Kenya secure a steady supply of fuel products, a move expected to help stabilize both countries’ energy sectors.
“The MOU will remain valid for five years or until either party chooses to terminate it under the agreement’s terms,” Wandayi noted, emphasizing the role of such agreements in fortifying regional energy stability.
The G-to-G deal aligns with Kenya’s previous agreements with Gulf-based oil companies, under which local firms paid in shillings for petroleum products supplied in dollars.
This mechanism not only alleviated exchange rate pressures but also provided a buffer against fluctuating global oil prices.
The extended Gulf oil agreement, initially set to conclude in April 2023, is now extended until December 2024, reflecting Kenya’s ongoing commitment to reduce its dependence on volatile markets and protect its foreign currency reserves.
