President William Ruto has defended the government-to-government (G-to-G) fuel import arrangement, saying it has helped protect Kenya from a deeper fuel shortage and foreign exchange strain at a time when global oil markets remain unstable.
Speaking on Friday at State House Mombasa, the President said the system introduced in 2023 has ensured steady fuel supply across the country, stabilised pump prices, and reduced pressure on the shilling despite ongoing global energy disruptions.
Ruto said the arrangement has played a key role in shielding the economy from repeated shocks that would otherwise have affected fuel availability and foreign exchange stability.
He explained that before the G-to-G model was introduced, oil marketers relied on the spot market system, where they had to compete for United States dollars within short timelines, a situation he said placed heavy strain on the local currency.
“The arrangement has stabilised fuel pricing compared to the old spot market system, where prices fluctuated sharply every month,” he said.
Ruto noted that the earlier system contributed to fast depreciation of the Kenya shilling and exposed the country to frequent fuel supply uncertainty whenever global prices increased.
He further said the current framework has ensured uninterrupted fuel supply even during international disruptions affecting oil shipping and distribution chains.
“Through the government-to-government fuel supply framework, we have secured guaranteed fuel supplies despite global supply chain disruptions, ensuring uninterrupted fuel availability across the country,” Ruto said.
The President added that the arrangement has eased pressure on the country’s foreign exchange reserves by allowing more flexible payment terms for fuel imports.
“The G-to-G arrangement has guaranteed supply even when we have disruptions and has made it possible for us to pay on terms that do not put pressure on our dollar reserves,” Ruto said.
He warned that without the arrangement, Kenya would be facing a more severe economic challenge, especially in terms of fuel availability and dollar shortages.
“Without it, the country’s situation would be much worse. There would be a major crisis of foreign currency and a major crisis of fuel supply,” he said.
Ruto also said the framework has helped the country remain more resilient during global oil shocks that have affected many economies, including those with stronger financial systems.
“The reality is that no country can completely escape a global oil shock of this magnitude. Even advanced economies with far greater financial resources than Kenya are facing similar challenges,” Ruto said.
He accused some political leaders of using the global fuel situation to advance political interests instead of offering practical solutions.
“I know there are those trying to turn these global crises into politics—people seeking to exploit public pain for political gain and pretending there are easy options,” he said.
The government-to-government fuel import arrangement has remained a subject of debate since its introduction in 2023, with supporters crediting it for stabilising supply and prices, while critics continue to question its long-term sustainability and transparency.