Rubis Energy Converts €30 Million in Pending Fuel Subsidy Dues into Government Bonds

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Rubis Energy Kenya, an oil marketer, converted €30 million (Sh4.7 billion) worth of pending fuel subsidy dues into government bonds by the end of June 2023. This move is part of the Kenyan government’s agreement with oil marketers to address payment delays. The firm, along with other oil marketers, opted to settle Sh45 billion in pending bills through a swap into a three-year Treasury bond.

Key Points:

  • Rubis Energy Kenya converted €30 million (Sh4.7 billion) in pending fuel subsidy dues into government bonds as part of a deal with the Kenyan government.
  • The conversion corresponds to a swap of receivables with the Kenyan government for a three-year Treasury bond in relation to petroleum product subsidy payments.
  • The Kenyan government issued a tap sale of a three-year paper in late June to facilitate the conversion, raising Sh18.6 billion at a rate of 14.23 percent.
  • The subsidy, initiated in April 2021, aimed to cushion consumers from high pump prices during the Covid-19 pandemic’s impact on the economy.
  • After paying oil marketers Sh124 billion under the plan, the government had arrears of Sh45 billion, which the bond conversion was intended to address.

Analysis: The conversion of pending fuel subsidy dues into government bonds by Rubis Energy Kenya is a strategic move in response to payment delays. This action aligns with the broader initiative of the Kenyan government to address outstanding bills with oil marketers. The issuance of a three-year Treasury bond provided the mechanism for this conversion. By taking this step, Rubis Energy and other oil marketers aim to navigate short-term liquidity challenges and potentially benefit from the bonds’ long-term value. This financial strategy allows both parties to manage cash flow effectively.


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