The National Oil Corporation of Kenya has signed a deal with the Saudi state-owned Aramco to supply refined fuel at an exclusively lower price than the global cost of crude fuel.
The deal which was signed through an intergovernmental agreement is expected to reduce the price of fuel products in the country that have skyrocketed in the recent past.
In the deal, the National Oil Company will import 30 per cent of the country’s monthly petroleum requirements starting in August.
The National Oil Corporation CEO Leparan Ole Morintat revealed the Memorandum of understanding has already been signed and the venture is headed for the negotiation of the contract terms phase.
“We already signed the MoU and the next phase is negotiating the contract terms, we are waiting on them as from last Sunday,” Morintat said.
“The plan is to start trials in August, for two months and see the impact of the exclusive prices that Saudi Aramco will be giving us. Then we will fully start in October.”
According to the deal, Saudi Aramco will finance the shipment of the products and also provide an extended credit period which the National Oil Corporation will pay within two and three months.
Saudi Aramco will also organise the financing of the product with financiers in Dubai in an arrangement that will open doors for the National Oil Corporation to get cheaper credit for buying and shipping petroleum products.
Saudi Aramco is the biggest oil company worldwide that controls market shares in Europe, North America and Asia.
This will bring relief to Kenyans who are already writhing under the weight of the high cost of living caused by the high fuel prices globally.