Thursday, June 15, 2023 – Energy Cabinet Secretary Davis Chirchir has come clean on why fuel prices have not come down despite President William Ruto’s oil deal with Saudi Arabia.
Speaking to the press after a session with the Parliamentary Committee on Energy, Chirchir noted that some of the Saudi oil dealers were still doubtful of the country’s decision to ditch dollars for Kenya shillings in the international transaction.
According to the CS, some even believed that Ruto’s deal with Saudi Arabia would affect their businesses and that’s why not much has come from it in terms of lowering fuel prices as Ruto had promised.
However, Chirchir stated that after purchasing petroleum under the deal for two months, many of the investors had begun buying into the idea.
He asked Kenyans to give the government more time to enable the purchase of petroleum in Kenyan shillings to be accepted by international oil companies.
According to the CS, the more investors adopt the new purchase deals, the easier it would become to reduce fuel prices in the country.
“We have used the deal for two months now and the international oil companies who sell to us began understanding that the risk of the payment method is minimal as opposed to what they had earlier believed,” he stated.
Chirchir added that the only way to reduce the fuel prices at the time was to renegotiate the percentage paid as insurance cost during purchase.
“A risk taker has to insure the purchase and that costs about 0.7 per cent of the total cost. We will have to renegotiate that percentage and try getting it to zero per cent to allow us to save Ksh1 on the cost of petroleum per litre,” he explained.
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