Fuel prices could drop as Kenya seals deal with Saudi Arabia

In a bid by the government to manage the skyrocketing fuel prices, Kenya will from August start shipping fuel from Saudi Arabia at lower prices.

National Oil Corporation of Kenya (Nock) says it has entered a government-to-government deal that will see the state-owned body import fuel from Saudi Aramco at 'exclusively' lower prices than the global costs of crude.

In the Memorandum of Understanding, Nock will ship in 30 percent of the country's monthly petroleum requirements which is likely to lower pump prices and ease the burden on consumers.

"We already signed the MoU and the next phase is negotiating the contract terms, we are waiting on them as from last Sunday," Nock Chief Executive Officer Leparan ole Morintat told Business Daily.

"The plan is to start 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."

In the deal, Saudi Aramco - owned by the Saudi government - will provide the product with an extended credit period. Nock will be expected to pay within 60 to 90 days.

Saudi Aramco is the largest oil company in the world by revenue with huge presence in Asia, European and North American markets.