Expensive Fuel: Govt Extends G2G Oil Import Deal with Gulf Nations until 2028 as Pump Prices Soar
- The Energy and Petroleum Regulatory Authority (EPRA) raised pump prices for the period between July 15 and August 14, 2025
- Energy Cabinet Secretary (CS) Opiyo Wandayi explained to Members of Parliament (MPs) that the government continues to stabilise prices under the G2G arrangement
- Wandayi revealed that the arrangement has been extended further to 2028, following the government of Uganda's decision to import oil
- Speaking to TUKO.co.ke, Petroleum Outlets Association of Kenya (POAK) Martin Chomba explained why G2G has been significant
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Wycliffe Musalia has over six years of experience in financial, business, technology, climate, and health reporting, providing deep insights into Kenyan and global economic trends. He currently works as a business editor at TUKO.co.ke.
Nairobi, Kenya - The government of Kenya has further extended the oil import deal with Gulf nations to 2028.
Source: Twitter
President William Ruto's administration signed the Government-to-Government (G2G) agreement with three oil-producing companies from the UAE and Saudi Arabia in March 2023.
Why Kenya entered G2G oil deal
The deal was aimed at allowing the country to import fuel on credit in a move to lower rising prices and stabilise the exchange rate.
On Tuesday, July 22, 2025, Energy Cabinet Secretary (CS) Opiyo Wandayi told the National Assembly Committee on Energy that the government continues to stabilise prices under the G2G arrangement.
When will the G2G agreement end?
Wandayi revealed that since the programme launch, 170 fuel cargoes have been successfully delivered, assuring security of supply for the country and the region.
The CS revealed the government-to-government oil import deal has been extended by an additional 11.5 months for diesel up to mid-December 2025; 15 months for super petrol up to the end of March 2026, and 16.5 months for jet A1 up to mid-May 2026.
"The arrangement is now set to expire within the first quarter of 2028," Wandayi said.
Why is govt extending G2G?
CS Wandayi noted that the petroleum product-specific extension resulted from the Ugandan government's move to exit oil imports from Kenya.
Source: Twitter
President Yoweri Museveni's administration sought to import oil directly via the Uganda National Oil Company (UNOC).
Speaking exclusively to TUKO.co.ke, Petroleum Outlets Association of Kenya (POAK) chair Martin Chomba explained that Kenya still benefits from the G2G oil deal.
Chomba cited the stabilising exchange rate, which has strengthened the shilling and improved US dollar supply in the market.
"G2G has its merits and demerits. I know one of the things that G2G has done, very, very importantly, is to stabilise our forex. We can take everything away from G2G, but we cannot take that away from them," said Chomba.
Will fuel prices continue to increase without G2G?
The chair warned that if the government halts the G2G arrangement, the shilling value will depreciate, causing pressure in the supply market and an increase in fuel prices.
"If we remove G2G right now, and we say our forex now rises maybe to 150 exchange rates or 160, then it means, because we buy fuel in dollar denomination, it means that there will have been an increment of about 30 shillings per dollar.
"So the prices of fuel will actually go up, other than go down," he explained.
What's the current fuel price in Kenya?
The extension of the G2G arrangement came amid the rising fuel prices in the country.
Energy and Petroleum Regulatory Authority (EPRA) raised pump prices for petrol, diesel and kerosene in July 2025.
In Nairobi, a litre of petrol retails at KSh 186.31, diesel at 171.58 and kerosene at KSh 156.58.
Proofreading by Mercy Nyambura, copy editor at TUKO.co.ke.
Source: TUKO.co.ke
