Oil Marketers Pout at Government’s Move of Converting Oil Debt into Bond

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Oil marketers claim President William Ruto’s administration is arm-twisting them, to convert the debt of the fuel subsidy into bond.

The government now wants to convert Sh45.8 billion arrears of the fuel subsidy into a bond, as the Kenya Kwanza administration runs out of fiscal space, hurting its ability to settle pending bills locally.

Oil marketers disclosed early this month, state officials told them of their decision and warned them that if they rejected it, they would lose out on the payout of the billions.

Although a majority of the dealers are reported to have declined, the government claimed earlier this month that it had reached an arrangement with oil marketers to convert the Sh45.8 billion in subsidy arrears into a three-year government paper.

The conversion is set to ease the burden of making billions of shillings in a one-off payment as the government races to ensure it does not default on foreign debt payments without disrupting other operations.

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