Rwanda is set to transition to a government-to-government (G-to-G) fuel importation model starting August 2026, dealing yet another blow to Kenya’s oil trading sector. The announcement comes barely two years after Uganda made a similar switch, continuing a trend that is steadily squeezing Kenyan marketers out of the lucrative East African fuel trade.
Rwanda has selected OQ Trading — the international energy arm of Oman’s government — as its new state-to-state fuel supplier. The arrangement spells the end of a significant revenue stream for Kenyan oil dealers, who had previously been responsible for roughly 30 percent of Rwanda’s fuel imports. That is a substantial slice of business that will now be redirected entirely under the new model.
Rwanda’s move is partly driven by a desire to bring down persistently high fuel costs. The country currently has the most expensive petrol in the region at $2 per litre, well above Uganda’s $1.704 and Kenya’s own $1.643. Kigali has pointed to global supply disruptions partly caused by the US-Israel conflict, which has affected oil flows from Iran, as one of the key factors pushing prices higher.
One silver lining for Kenya is that Rwanda still plans to route its fuel imports through Kenyan infrastructure. The Mombasa port and the Kenya Pipeline Company (KPC) network are expected to be used for storage and transportation under the new arrangement, which would at least generate transit revenues for Kenya. However, detailed user agreements between the two governments have not yet been finalised.
This latest development echoes what unfolded in 2023, when Uganda signed a G-to-G deal with Vitol Bahrain, completely shutting Kenyan private oil marketers out of that supply chain. The back-to-back regional losses mark a troubling pattern for Kenya’s oil trading industry, which is struggling to adapt to a rapidly changing landscape.
There is a certain irony in the situation. Kenya was itself a regional trailblazer in G-to-G fuel arrangements, entering landmark supply agreements with Saudi Aramco and the Abu Dhabi National Oil Company in April 2023 to secure its own fuel imports. That model has since been adopted by both Rwanda and Uganda, now turning the tables on Kenya’s private oil sector.
With two of its biggest regional customers now bypassing Kenyan traders altogether, the export market available to local oil marketers has narrowed considerably. Dealers are now largely confined to supplying the Democratic Republic of Congo, Burundi, and South Sudan — a far cry from the broader regional footprint they commanded just a few years ago.
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