Treasury Cabinet Secretary John Mbadi has warned that the Kenyan shilling could weaken to as low as Ksh180 against the U.S. dollar if the current government-to-government (G-to-G) fuel import deal is revoked.

🇰🇪 Breaking It Down

Speaking during a church service in Siaya County on Saturday, May 23, Mbadi defended the controversial fuel import arrangement, arguing that it has helped stabilise fuel supply and protect the local currency from further depreciation.

He warned that scrapping the G-to-G fuel arrangement would expose Kenya to severe dollar shortages and intensify pressure on the shilling.

“If you don't have a G-to-G arrangement where payment is deferred even by three months, there will be strain on our shilling because the demand for the dollar will be high,” Mbadi warned.

📌 What You Need to Know

He explained that higher demand for dollars by fuel importers would push the exchange rate higher , potentially weakening the shilling from the current Ksh129 to between Ksh160 and Ksh180 against the dollar.

"Once the dollar strengthens, fuel prices will be higher than what we are seeing. So let people stop misleading others,” Mbadi cautioned.

The CS further dismissed claims that Kenya’s high fuel prices are purely a local problem, insisting the crisis is part of a wider global disruption affecting petroleum supply chains.

“Many politicians have localised this thing as if it were a Kenyan problem alone. I want to tell you that the problem of fuel is not a Kenyan problem. This is a global problem,” he stated.

According to the CS, the Middle East war disrupted the normal flow of petroleum products, forcing Kenya to source fuel from alternative markets outside the region.

“There is no fuel that is coming from the Middle East to many parts of the world, and that is why the supply chain has been disrupted,” he said.

📰 Source: Kenyans.co.ke