How Ruto deal with Gulf oil firms inflated pump prices

Epra fuel prices review

Besides the costs arising from the inflation of the premium, consumers paid more to meet the funding shortfall in the new fuel supply deal. PHOTO | FILE | NMG

Photo credit: Nation Media Group

Consumers in Kenya and neighbouring countries paid billions of shillings in additional cost of petroleum products under the government-to-government (G-to-G) oil deal that inflated the price of fuel compared to the previous supply system on which it was modelled.

The additional burden was introduced by increasing the premium charged by the oil importers compared to what was collected under the open tender system (OTS), the Auditor-General Nancy Gathungu said in a review of the G-to-G cost structure.

The new oil purchase deal started in March last year, with the government saying it would help ease the demand for the US dollars and ultimately stabilise the local currency.

But the unexplained premium increase saddled consumers with additional costs, a move that saw Uganda protest the mark-up and take measures to purchase petroleum products through Tanzania.

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