NAIROBI, Kenya — Former UNCTAD Secretary-General Mukhisa Kituyi has criticised Kenya’s Government-to-Government (G-to-G) oil import arrangement, arguing that it has failed to shield consumers from rising fuel prices and instead benefits private commercial interests.
Speaking during an interview with NTV Kenya, Kituyi said the structure of the deal undermines its intended purpose of stabilising the petroleum market, particularly during global shocks such as the ongoing tensions in the Gulf region.
“The importer should be the National Oil Corporation of Kenya, because as a national entity it can be a player in stabilising and pressing down pressure on petroleum markets,” he said.
He argued that allowing private Oil Marketing Companies (OMCs) to handle imports introduces profit-driven dynamics that dilute the benefits of the G-to-G framework.
“Because the importer is not government and there are commercial interests, we start suffering the consequences of greed disguised as G-to-G,” Kituyi added.
Kenya adopted the G-to-G model in 2023, sourcing fuel through major suppliers including Saudi Aramco, Abu Dhabi National Oil Company (ADNOC), and Emirates National Oil Company Group (ENOC), in a bid to address dollar shortages and stabilise supply.
However, Kituyi maintained that alternative structures — including direct state participation in imports — would offer more effective long-term price control. He also proposed temporary tax relief during global crises.
“In times of crisis like these, I would suspend excise duty on petroleum and the Road Maintenance Levy to reduce the price at the pump,” he said.
The debate comes amid sharp fuel price increases announced by the Energy and Petroleum Regulatory Authority (EPRA), which raised pump prices by up to Sh40 per litre earlier this month, pushing petrol and diesel above Sh200 in Nairobi.
The hikes were partially revised after the National Treasury cut Value Added Tax on petroleum products from 13 P.c to 8 P.c, resulting in a reduction of up to Sh10 per litre.
President William Samoei Ruto has defended the high fuel costs, attributing them to Kenya’s economic status as a lower middle-income country and cautioning against direct comparisons with neighbouring states.
“If you want to compare Kenya fairly with others, compare Kenya with other middle-income countries,” Ruto said.
Fuel pricing in Kenya remains heavily influenced by taxation, with at least nine levies applied to petroleum products, including VAT, excise duty, and the Road Maintenance Levy.
As pressure mounts over the cost of living, the effectiveness of Kenya’s fuel import and pricing model is likely to remain a central issue in economic and political discourse ahead of the 2027 elections.
