Kenya G2G Petroleum Deal Middlemen: Ruto, Gachagua Clash Over Fuel Imports

• President William Ruto defended Kenya's government-to-government (G2G) petroleum importation model, asserting it eliminated brokers and secured cheaper fuel.
• Former Deputy President Rigathi Gachagua questioned the G2G deal, citing Ugandan President Museveni's revelation about costly fuel imports through Kenyan intermediaries.
• Gachagua alleged the G2G arrangement benefits private interests and called for increased competition among oil marketers.
• Former Interior Cabinet Secretary Fred Matiang'i demanded full public disclosure of the G2G agreement and scrutiny of any middlemen involved.
• Matiang'i also advocated for restoring the National Oil Corporation of Kenya (NOCK) to its proper role in market stabilization and supply security.

The G2G agreement must be published in full, and the role of any intermediaries must be thoroughly disclosed and scrutinized.

A significant debate has emerged within Kenya's political landscape regarding the country's government-to-government (G2G) petroleum importation arrangement, following revelations from Ugandan President Yoweri Museveni. While President William Ruto staunchly defends the current model, former Deputy President Rigathi Gachagua has leveraged Museveni's comments to voice strong criticisms, alleging the involvement of intermediaries and private interests.

Speaking to Kenyans in New York on Sunday, September 20, President Ruto asserted that the G2G model has successfully eliminated brokers, allowing Kenya to deal directly with petroleum product producers. He highlighted that upon assuming office, he addressed a critical shortage of dollars that had led to dry fuel stations, claiming this issue is now permanently resolved. Ruto further contended that fuel products arrive in Mombasa at a lower cost compared to those destined for neighboring countries, challenging critics to present data proving a more cost-effective alternative. He also noted that Burundi had approached Kenya to understand the mechanics of this arrangement.

Conversely, Rigathi Gachagua stated that President Museveni's disclosure regarding Uganda's previous reliance on Kenyan intermediaries for petroleum imports, which inflated costs, validated his long-standing concerns about Kenya's own G2G deal. Gachagua alleged, without independent verification, that President Ruto is connected to a company involved in the arrangement, suggesting that what is presented as a government-to-government procurement primarily benefits private entities. He advocated for increased competition among oil marketing companies, arguing that this would ultimately benefit consumers, and claimed that domestic fuel prices have not decreased in line with global oil price reductions.

The controversy has intensified with calls for greater transparency from former Interior Cabinet Secretary Fred Matiang'i. Matiang'i, who previously opposed the G2G oil deal and publicly called for its details to be made public on Sunday, April 19, during an appearance on Citizen TV's Sunday Live, reiterated his demands. He emphasized that President Museveni's remarks have brought the role of alleged middlemen in the petroleum supply chain into sharp focus.

Matiang'i specifically demanded that the G2G agreement be published in its entirety. He also insisted on the full disclosure and rigorous scrutiny of any intermediaries involved in the deal. Furthermore, he called for the National Oil Corporation of Kenya (NOCK) to be reinstated to its proper function of securing supply and helping to stabilize the domestic fuel market. Matiang'i underscored the public's right to know who benefits from the arrangement and its true cost to the nation.

The ongoing debate highlights critical questions surrounding the integrity and efficiency of Kenya's petroleum supply chain. Allegations of private interests benefiting from a government-to-government arrangement, as raised by Gachagua, point to potential compliance risks and a lack of equitable market access. The argument that fuel prices have not reflected international declines further fuels public skepticism about the current model's economic benefits for ordinary Kenyans.

The demand for restoring NOCK's central role in securing supply and stabilizing the market underscores a broader concern about the institutional framework governing petroleum importation. A transparent and competitive environment, where oil marketing companies can vie for business, is seen by critics as essential for ensuring fair pricing and consumer protection. The absence of such competition, coupled with opaque deal structures, could lead to inflated costs and reduced accountability within a vital economic sector.

This unfolding situation signals heightened scrutiny of Kenya's G2G petroleum deal, with significant implications for transparency, governance, and consumer welfare. The public divergence among high-profile political figures, coupled with specific demands for disclosure, places immense pressure on the government to provide clarity on the arrangement. The allegations surrounding middlemen and private beneficiaries, if substantiated, could undermine public trust and necessitate comprehensive investigations into the petroleum supply chain.

Ultimately, the outcome of this debate will shape future energy sector engagements in Kenya, potentially leading to increased due diligence requirements and a greater emphasis on contractual transparency. The calls for full publication of the G2G agreement and a thorough examination of all parties involved are crucial steps towards ensuring accountability and fostering a more equitable and efficient fuel market for all Kenyans.

This development signals heightened scrutiny of Kenya's G2G petroleum deal, with calls for transparency and investigation into alleged middlemen. Lawyers and compliance officers should advise clients on potential compliance risks, monitor for contract disclosure, and anticipate increased due diligence requirements for energy sector engagements in Kenya.

Source: Original reporting via Tuko.co.ke