Every time instability grips the Gulf, African governments are reminded of an uncomfortable fact: many of their fuel systems still depend on assumptions that hold only in calm conditions. When a strategic waterway such as the Strait of Hormuz comes under pressure, supply chains tighten, shipping grows more expensive, and traders become more selective. By the time that pressure reaches the pump, the economic and political damage is already underway.
That pattern plays out differently across the continent, but the underlying vulnerability is the same. In West Africa, global shocks expose a familiar contradiction: being an oil producer is not the same thing as having a resilient downstream market. Nigeria remains the clearest case. Despite producing crude at scale, the country spent record sums on imported refined petroleum in 2024, with official data from the National Bureau of Statistics showing import costs more than doubling in a single year. According to the US Energy Information Administration, Nigeria’s refined petroleum product imports averaged around 376,000 barrels per day between 2020 and 2024, a striking figure for Africa’s largest crude producer. Import dependence and foreign exchange pressure can quickly erase the advantages that crude production ought to confer.
Kenya has come through recent periods of volatility in better shape than many of its peers, and that is not accidental. The government-to-government fuel procurement framework, introduced in April 2023, has given the country a firmer grip over supply at a time when looser market structures are showing their weaknesses. The immediate trigger was clear: by 2022, petroleum imports had become one of the heaviest drains on Kenya’s foreign exchange reserves, putting serious pressure on the shilling. The G2G framework was designed to address this directly, replacing a tender-based system with structured agreements negotiated at government level with three Gulf state oil majors – Aramco Trading Fujairah, ADNOC Global Trading, and Emirates National Oil Company Singapore – on 180-day credit terms that gave Kenya considerably more breathing room than the previous arrangement allowed.
Critically, the model was designed neither as a purely state-run operation nor a conventionally liberalised one. The sovereign framework de-risks the arrangement at the top: government guarantees, extended credit, and diplomatically-anchored supply agreements. Execution, however, sits with the private sector. The oil majors, unwilling to send cargoes worth hundreds of millions of dollars into waters where they had no established local counterparty, exercised their own prerogative under the Master Framework Agreements to nominate the local companies they already trusted. They selected Gulf Energy, Galana Energies, and Oryx Energies – each chosen on the basis of long-standing commercial relationships, proven liquidity, and operational track records built over years of trading with the majors. Gulf Energy, for instance, had traded oil with the Gulf majors for over two decades before the G2G arrangement was formalised, accumulating the credentials, infrastructure, and relationships that made it a natural counterparty for a transaction of this scale. ADNOC and ENOC nominated Gulf Energy to handle diesel, jet fuel, and petrol supply respectively; Aramco selected Oryx and Galana. The result was a private-sector execution layer that the international suppliers trusted and that the Kenyan market already knew.
The rationale for the broader structure was straightforward. By deferring dollar demand for petroleum imports, the government aimed to ease pressure on foreign exchange circulation and slow the pace of shilling depreciation. In practice, the framework also contributed to more consistent fuel availability across Kenya’s domestic market and the regional corridor linked to its infrastructure – an outcome that would have been far harder to sustain under a purely reactive spot-buying system.
Procurement architecture sits close to the centre of economic resilience. It determines how exposed a country is when freight costs jump, when traders reprice risk, and when public anxiety begins to feed on itself. In that setting, the difference between a disciplined supply structure and a reactive one can be measured quickly in pump prices, inflation, and political stress. In a benign market, many procurement systems can look adequate. The real test comes when conditions deteriorate. Spot buyers without depth, coordination, or strategic cover tend to pay more and worry more. Governments then find themselves managing not simply fuel costs, but the fear of disruption itself.
There is a wider policy lesson here. For years, many governments were encouraged to believe that downstream liberalisation would, by itself, solve the problem of fuel supply. In ordinary times, competition and market access can improve efficiency. During geopolitical crises, those benefits often prove thinner than expected. Risk premiums widen, timing becomes more important, and stronger counterparties gain leverage. Weakly coordinated importers are left exposed. OPEC’s latest outlook estimates that Africa faces a $100 billion refining investment gap over the next 25 years, and the continent’s structural dependency on imported refined products is unlikely to resolve itself without deliberate policy intervention. The state’s role changes under those conditions. It is no longer enough to regulate at the margins.
The G2G model’s most underappreciated quality is how readily it can travel. Its architecture -sovereign-level agreements providing the credit and supply security, private-sector players providing the commercial execution – does not depend on circumstances unique to Kenya. Any sub-Saharan country with a credible government counterparty, an established relationship with a Gulf state oil major, and licensed local traders with the right track record can replicate the basic structure. The benefits compound: forex demand is smoothed rather than concentrated in monthly spot-buying spikes; supply security is anchored by sovereign commitments rather than market sentiment; and the private sector retains the operational flexibility that state-run systems often lack.
Kenya appears to have understood that earlier than many others. Its fuel model is neither improvised nor purely ideological. It is a practical response to a world in which energy security is once again being shaped by conflict, shipping risk and geopolitical rivalry, and one that is relevant far beyond Nairobi. The region is already signalling as much. The UAE’s departure from OPEC suggests Gulf producers are recalibrating their own strategic calculus. Talks are advancing on a joint refinery at Tanzania’s port of Tanga, backed by Dangote and endorsed by the presidents of Kenya and Uganda, reflecting a broader regional push to reduce dependence on imported refined products. Fuel pricing pressures across East Africa are forcing governments to ask harder questions about how they procure, not just how much they pay. Policymakers from Abuja to Addis Ababa are likely to look at the Kenyan experience and ask whether more coordinated procurement, with sovereign cover and private-sector execution, can offer a useful buffer when the next shock arrives. That would be a sensible question.
The framework is not without its difficulties. Recent scrutiny of procurement practices within Kenya’s fuel supply chain serves as a reminder that institutional integrity and transparency are indispensable to making any such model work sustainably. A well-designed structure can absorb external pressure; it cannot compensate for weak governance. Those caveats should be kept in view.
They do not, however, weaken the central argument. Kenya’s achievement lies in having built a procurement model better placed to absorb pressure than most. In a volatile energy market, resilience is rarely dramatic. It shows up in the absence of queues, in steadier prices than feared, and in the state’s capacity to maintain control when others are forced into improvisation. For African governments rethinking how best to protect themselves from external shocks, that combination is likely to look increasingly attractive.