The National Oil Corporation of Kenya (NOCK), a government-owned parastatal, has inked a deal with Saudi Arabia to import fuel at lower prices.

In an interview held on Monday, June 27, NOCK CEO, Leparan Ole Morintat noted that the corporation would get fuel from Saudi Arabia’s Aramco which will supply refined fuel at exclusively lower prices. 

The NOCK boss noted that the trial phase would begin in August 2022 and officially roll out in October 2022.

“We already signed the MoU and the next phase is negotiating the contract terms, we are waiting on them as from last Sunday,” he stated. 

“The plan is to begin 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,” he added. 

Morintat noted that under the deal, the country would import 30 percent of the country’s monthly petroleum requirements in a move that is set to ease the burden of the current fuel prices that have shot up in the recent past.

Part of the agreement involves Aramco paying for the shipment of products and NOCK repaying within 90 days.

Saudi Aramco is one of the largest oil companies in the world that has established itself across Asia, Europe and the United States of America. 

This comes barely weeks after Treasury CS Ukur Yatani announced that the government would discontinue the fuel subsidy programme as a result of the hiked global prices. 

To date, Kenya has spent over Ksh67 billion as subsidies to offset the high prices in the current financial year, with the amount slated to cross Ksh84 billion towards the beginning of July. 

“For this reason, a gradual adjustment in domestic fuel prices will be necessary in order to progressively eliminate the need for the fuel subsidy, possibly within the next Financial Year,” CS Yatani stated in a statement.