- Kenya’s Energy Cabinet Secretary, Opiyo Wandayi, announced a technical team to assist Malawi in structuring a government-backed fuel importation deal amid severe shortages in Malawi and Zambia.
- The initiative follows Kenya’s successful transition to a government-to-government (G-to-G) fuel import model with Gulf producers. It aims to share insights on procurement and logistics to stabilise regional fuel supply.
On Friday, October 25, Kenya’s Energy Cabinet Secretary, Opiyo Wandayi, announced a new technical team to help Malawi structure a government-backed fuel importation deal. This initiative comes as Malawi and Zambia face severe fuel shortages. Both countries discuss replicating Kenya’s successful model for direct fuel imports from Gulf producers.
Kenya recently shifted from the Open Tender System, which governed fuel imports for nearly a decade, to a direct procurement strategy. This strategy involves government-to-government (G-to-G) agreements with Saudi Arabia and the United Arab Emirates (UAE). An official from the Energy Ministry stated, “The countries have expressed interest in our G-to-G deal, and we had officials in the country last week. They are learning from us on how we structured our deal. Malawi also requested a berth at the port for fuel.”
In this G-to-G agreement, three state-owned Gulf firms—Saudi Aramco, Abu Dhabi Oil Company (ADNOC), and Emirates National Oil Company (ENOC)—can select oil marketing companies (OMCs) to distribute fuel in Kenya. Wandayi emphasised the importance of this collaboration, saying, “I have today commissioned a technical team to explain to the Malawian delegation the structure of the G-to-G arrangement, the challenges experienced, and the mitigation measures put in place to counter the challenges.”
Malawi, Zambia, and Burundi struggle with fuel shortages due to a lack of US dollars for payments and inefficiencies in freight logistics. This shortage has caused skyrocketing pump prices across the region. Countries rely on the dollar for fuel imports, highlighting why inadequate dollar supply can disrupt fuel access and cripple economies.
The fuel crisis has significant implications for daily life in these countries. Citizens face long lines at petrol stations and rising transportation costs. Business operations suffer, affecting the broader economy. The government in Malawi is under pressure to find immediate solutions to the crisis.
Kenya’s G-to-G arrangement offers a potential model for addressing these challenges. By importing fuel directly from Gulf producers, Kenya has streamlined its supply chain and reduced costs. This approach could benefit Malawi and Zambia as they seek reliable and affordable fuel sources.
Wandayi’s initiative aims to share Kenya’s expertise with Malawian officials. The Kenyan team will provide insights into the structure of the G-to-G deal, including its benefits and the challenges faced during implementation. By learning from Kenya’s experience, Malawi hopes to develop a more effective fuel import strategy.
The technical team’s discussions will cover various aspects of the procurement process, including logistics, financing, and partnerships with oil marketing companies. These elements will ensure a steady fuel supply and stabilise prices.
As the situation evolves, regional cooperation will prove essential. Collaborative efforts among Malawi, Zambia, and Kenya could lead to more resilient fuel supply systems. By sharing best practices, these countries can work together to mitigate the impact of fuel shortages on their economies.
In summary, Kenya’s support for Malawi in structuring a fuel importation deal represents a proactive step in addressing regional fuel shortages. This collaboration could pave the way for more sustainable energy solutions in East Africa. As countries navigate these challenges, the lessons learned from Kenya’s G-to-G arrangement may provide a vital roadmap for recovery and growth in the region.