By Benadeta Mwaura - Reporter
Kenya , July 10, 2026 - South Sudan has moved to end the exclusive fuel import arrangement previously held by a Kenyan oil marketer, opening its Government-to-Government (G-to-G) petroleum import programme to additional suppliers in a move expected to increase competition, lower fuel prices and reshape regional fuel trade.
The latest policy shift means Pacific Petroleum, which has been the sole importer of petrol and diesel into South Sudan under the bilateral arrangement with Kenya, will no longer enjoy exclusive rights. Instead, Juba has nominated three additional oil marketing companies to participate in the programme beginning August 2026.
The decision marks a significant change in South Sudan's fuel import strategy, coming just months after the country adopted the Government-to-Government framework modelled on Kenya's own fuel import system.
Under the existing arrangement, petroleum products destined for South Sudan have been imported through Kenya's G-to-G programme before being transported via the Northern Corridor to Juba. Pacific Petroleum was designated as the sole importer responsible for bringing in fuel and supplying licensed oil marketers within South Sudan.
South Sudanese authorities say expanding the number of importers is intended to foster competition in the downstream petroleum sector, improve supply reliability and ultimately reduce fuel prices for consumers.
The move follows weeks of controversy surrounding the exclusive arrangement. Oil marketers operating in South Sudan had complained that relying on a single importer reduced competition and contributed to higher fuel costs, while independent dealers argued that the monopoly restricted market access.
The exclusive deal has also faced legal challenges.
A public interest petition filed before South Sudan's Court of Appeal questioned the legality of awarding exclusive import rights to one company without competitive procurement. The court subsequently issued interim orders suspending aspects of the arrangement pending determination of the case, with petitioners arguing that the framework undermined fair competition and disadvantaged other licensed oil marketing companies.
The policy reversal also comes after recent tensions within the fuel supply chain.
Last month, South Sudan warned oil marketing companies against importing petroleum products outside the approved Government-to-Government framework, threatening to impound fuel cargoes and revoke operating licences for firms found violating the arrangement. Authorities accused some traders of bypassing the designated import channel by diverting cargoes intended for neighbouring markets into South Sudan.
Kenyan authorities had also acknowledged operational challenges affecting the programme.
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Correspondence between Kenya's Ministry of Energy and Petroleum and industry players showed that Pacific Petroleum experienced difficulties evacuating fuel from the Kenya Pipeline Company (KPC) system and private storage terminals, prompting discussions between government officials, the Energy and Petroleum Regulatory Authority (EPRA), Kenya Pipeline Company and participating oil marketers on improving the movement of petroleum products destined for South Sudan.
The latest reforms are expected to have implications for Kenya's petroleum sector.
South Sudan remains one of the largest destinations for fuel transported through the Port of Mombasa and the Northern Corridor. Increased participation by multiple suppliers could alter cargo allocation, storage logistics and pipeline utilisation while potentially boosting efficiency through greater competition.
The development also reflects a broader trend across East Africa.
In recent years, Kenya, Uganda, Rwanda and South Sudan have all adopted Government-to-Government fuel import frameworks aimed at shielding domestic markets from global supply disruptions, reducing foreign exchange pressures and improving energy security.
While Kenya's model relies on three Gulf-based national oil companies to supply petroleum products, neighbouring countries are increasingly establishing state-backed entities to oversee imports instead of relying on private marketers alone.
South Sudan's decision could result in lower wholesale fuel prices if increased competition among importers translates into better procurement terms and improved supply efficiency. However, they caution that implementation will be closely watched to ensure the transition does not disrupt fuel availability in one of East Africa's most import-dependent energy markets.
For Kenya, the changes underscore the evolving dynamics of regional fuel trade, where governments are increasingly balancing energy security with market competition as they seek to keep fuel affordable while safeguarding strategic petroleum supply chains.