President William Ruto’s plans to import cheaper oil through government-to-government could hit a roadblock after marketers challenged the new tendering plan in court.
The dealers through their lawyer Ndegwa Njiru say the plan by the government to pick a local oil marketer is a breach of the Open Tender System where marketers competitively bid for the tender.
Kenya has since 2015 been buying petroleum under the “Open Tender System (OTS)” through the supervision of the Ministry of Energy. The tender is floated every month with 112 licensed oil marketing companies participating. The winner of the tender procures petroleum products on behalf of all the players.
Under President Ruto’s new plan, a local firm nominated by the ministry will import fuel and other marketers forced to buy for the local market and transit to neighbouring countries. Abu Dhabi National Oil Company (Adnoc) — the State-owned oil company of the United Arab Emirates will be supplying the fuel.
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Oil firms allege that there was no public participation and stakeholder consultation before the gazettement of the Petroleum (Importation) Regulations, 2023, which is a breach of the constitution.
The imports, which will come through a credit of six months and a year, are expected to ease a crisis in the foreign exchange market given that oil shipments account for 28 percent of Kenya’s monthly imports.
“The tender documents and tender agreement dated March 1 2023 anchored therein have sought to exclude any other marketing company from participating in the bidding process thus violating Article 227 of the constitution of Kenya,” the dealers say in the petition filed on Wednesday.
