Why National Oil and Kenya Pipeline Were Bypassed in the G-to-G Fuel Deal

Energy and Petroleum Regulatory Authority (EPRA) Director of Petroleum and Gas Edward Kinyua has revealed why the National Oil Corporation of Kenya (NOCK) and Kenya Pipeline Company (KPC) were left out of the Government-to-Government (G-to-G) fuel importation deal.

Speaking on Wednesday, April 15, Kinyua said the government had initially proposed NOCK as the local counterpart in the fuel deal.

However, he noted that Gulf oil companies declined to work directly with NOCK, instead insisting on partnering with firms with which they already have established ties.

According to Kinyua, the oil suppliers cited concerns over the risks involved in exporting cargo worth millions of dollars.

“The International Oil suppliers said they have never dealt with the National Oil Company of Kenya on a transaction of this magnitude. In fact, they said we could not choose a counterpart for them if they were sending a ship worth hundreds of millions of dollars into Kenyan waters without knowing who they were dealing with, or what would happen if anything went wrong with the cargo,” Kinyua explained.

The EPRA Director of Petroleum and Gas noted that the oil suppliers nominated Oryx Energies, Galana Energies Limited, and Gulf Energy Limited.

Additionally, One Petroleum Limited, Asharami Synergy, and Be Energy were nominated for the G-to-G oil deal.

“We received three nomination letters, nominating three companies. Initially, we had Oryx Energies, Galana Energies, and Gulf Energy. Later, three companies were added: One Petroleum, Asharami, and Be Energy,” he stated.

Kinyua also said KPC was not involved in the arrangement as its license is only to transport and store petroleum products.

“Kenya pipeline company is not a trader, its work is transporting petroleum. If you look at their license, it reads transport and storage of petroleum products; they have never traded,” Kinyua said.

Further, the EPRA Director said the G-to-G deal was introduced to address the demand for dollars and stabilize the shilling.

Before the intervention, Kinyua highlighted that the industry operated under a fractured system that struggled during the global foreign exchange crisis.

He mentioned that dollars were increasingly mopped up from the local market, and oil marketers faced a severe crisis in accessing the capital needed to secure supply.

“Recognizing this threat to national energy security, His Excellency intervened by establishing the G2G framework.

“This system allowed for a more structured procurement process, where we nominated and vetted world-class companies to trade oil under more favorable terms. This shift was not just about supply; it was about stabilizing the demand for dollars and protecting the shilling,” Kinyua stated.

The G-to-G came into place in April 2023 and involves Saudi Arabia’s Aramco, ADNOC, and the Emirates National Oil Company.

The deal utilizes a 180-day credit period, reducing immediate demand for dollars. Previously, Kenya operated under the Open Tender System (OTS).

This comes after EPRA revised retail fuel prices following a change in Value Added Tax (VAT) from 13% to 8%.

In a statement on Wednesday, April 15, EPRA said the new pricing will apply from April 16 to May 14, 2026.

In the latest review, pump prices for Super Petrol and Diesel in Nairobi have decreased by Ksh9.37 and Ksh10.21 per litre, respectively.

As such, super petrol, diesel, and kerosene now retail at Ksh197.60, Ksh196.63, and Ksh152.78 respectively in Nairobi.