According to a new method intended to reduce pressure on the foreign exchange rate by switching from settlement on delivery to 180-day credit, Kenya has released its first oil supply tender, the head of the country’s energy regulator announced on Tuesday.
Following a succession of record lows for the shilling, the government of President William Ruto of East Africa chose government-to-government oil supply contracts. He stated that the victor will provide goods for nine months while receiving payments every six months.
The prior method allowed participation from all Kenyan retailers, and the winner would supply the market for two months while paying for the goods in hard currency within five days of delivery.
According to Moses Kuria, the minister of trade, the government is going after Gulf-based energy exporters like Saudi Aramco and the UAE’s ADNOC.
Kenya’s usable foreign currency reserves are no longer sufficient to fund four months’ worth of all imports, as required by law. Currently, they handle imports for 3.69 months or $6.60 billion.