Petitioners have challenged in court Kenya government’s plan to take over all imports of petroleum products from private companies
Reports yesterday said the petitioners are seeking a ruling that will nullify the nationalization program by Kenyan government referencing imports of petroleum products   

Kenya decided to go with the plan to have all oil imports nationalized after a severe foreign exchange reserves crunch left the African country with just four months worth of foreign currency to cover imports.

 The government plan, through the ministry of energy is to take over all imports and pay for the supplies after at least six months, compared to payments due within a week per the current imports scheme.

Bloomberg said already four petitioners are in court with government over the matter. The news agency said on Thursday, that the filing in court was made by Ndegwa & Ndegwa Advocates on behalf of the petitioners.

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The nationalization of oil imports “amounts to unfair practice as an unconscionable representation that is excessively one sided” and favors the supplier rather than the consumer, the court documents say.

The Kenyan government should have thought of better ways to stabilize the bleeding of U.S. dollars instead of kicking private oil marketing firms out of business, according to the filing carried by Bloomberg.

If could be recalled that earlier this week, Kenya issued the first tender for oil imports under the new plan, with 180 days between product delivery and payment settlement.

Kenya is now seeking government-to-government contracts to procure oil products following the crash of the Kenyan currency and the acute shortage of foreign exchange reserves.

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The winner in this first tender will supply oil to Kenya for nine months and will be paid every six months, Daniel Kiptoo, director general of energy industry regulator EPRA told Reuters.

“By doing that we alleviate the pressure by removing a third of the demand for dollars in the market,” Kiptoo added.

By Ken Okafor

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