Nairobi — President William Ruto has dared Azimio La Umoja leader Raila Odinga to prove that the Government-to-Government oil deal was a scam instead of spreading unfounded allegations.
The Head of State reiterated that the G-to-G deal was above board saying the support received from the Oil Marketing Companies (OMCs) has proved the deal was legitimate.
"I want to challenge our competitors to prove to us it is a scam instead of asking us to prove that it's a scam. The stakeholders in the petroleum industry have confirmed that what we have done is the best for Kenyans," he said.
President Ruto told Odinga to shun skirting around the issue by seeking the contractual agreement entered between the OMCs and the government saying the documents are available in the public domain.
"Stop saying you want the contracts, the contracts are public domain, there is no secret contract anywhere. MPs from both the government and opposition are in Parliament, they can go look at the contracts and interrogate," President Ruto said.
"They will know we are running an administration that is above board and that looks for the best interests of the republic of Kenya," he added.
Odinga had demanded the cancellation of the government-to-government deal claiming it's a scam that has created a breeding ground for corruption in the country.
In his dossier on the government-to-government deal on oil importation which was entered in March this year, Odinga said other than keeping the cost of oil permanently high in Kenya, the deal was costing the country trade in petroleum with neighboring landlocked countries.
"There was no G-to-G. Kenya did not sign any contract with Saudi Arabia or the UAE. Only the Ministry of Energy and Petroleum signed a deal with state-owned petroleum companies in the Middle East. Why Ruto chose to characterize the deal as a G-to-G is the first red flag that points to mischief in this deal," he said.
He alleged that the government-to-government deal was not aimed at supplying oil on favorable terms but was a business deal to shield the three Kenyan companies from paying 30 percent corporate tax.
"Shielding the companies the three companies from this tax is the reason Ruto told Kenyans that it was G-to-G. Your guess is as good as mine on who is pocketing the unpaid corporate tax. But the burden of the unpaid corporate tax is passed to Kenyans at the pump," Odinga said.
In a joint statement, the oil companies stated that Under the G-to-G framework, the local Oil Marketing Companies pay for petroleum in Kenya Shillings and are no longer required to source for dollars in the local market.
"Previously OMCs were each required to source for dollars thereby creating artificially heightened demand which would cause distortion in the Forex market and echo to the rest of the economy," the OMCs stated.
The OMCs dispelled the allegations that the local companies involved in the G-to-G supply don't pay their corporate taxes, saying it's a requirement under the Energy Act 2019 and Petroleum Act 2019 that OMCs must obtain a Tax Clearance Certificate.
"A valid Import, Wholesale and Export Licence is a pre-requisite for a company to be a seller of product under the OTS Agreement or the G-to-G Agreement. The tax compliance status of the Nominated Oil Marketing Companies is easily verifiable through the Kenya Revenue Authority," the statement read.
The Oil Marketing Companies explained that the cost of fuel has continued to spike despite the G-to-G supply due to international oil prices and the prevailing forex rate.
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President William Ruto's government opted for government-to-government oil supply contracts in March this year after the shilling tumbled to record lows.
The government ditched the Open Tender System (OTS) that has been in use for importing fuel for nearly a decade in favor of direct procurement under a government-to-government deal with Saudi Arabia and the United Arab Emirates.
In the G-to-G deal, the three Gulf State-owned firms Saudi Aramco, Abu Dhabi Oil Company (ADNOC), and Emirates National Oil Company (Enoc) were given leeway to handpick local oil marketing companies that would distribute fuel on their behalf.
Odinga is pushing for the country to revert to the Open Tender System which he says ensures a guaranteed supply of petroleum product saying the G to G business model is hurting the consumers through exorbitant prices passed on the consumers.
