Three of Kenya's most senior petroleum sector officials have resigned and several others face criminal and administrative proceedings after a government investigation uncovered an alleged scheme to fabricate a national fuel shortage,
- •The claims and investigations include justifying an emergency procurement outside the sovereign supply framework, and import a substandard, overpriced consignment.
- •In a statement signed by Chief of Staff Felix Koskei, the Principal Secretary for the State Department of Petroleum Mohamed Liban, Kenya Pipeline Company PLC Managing Director Joe Sang, and Energy and Petroleum Regulatory Authority Director General Daniel Kiptoo Bargoria have stepped down.
- •Kenya Pipeline Company's board moved swiftly following Sang's arrest, naming Pius Mwendwa, General Manager for Finance, as acting Managing Director.
The IMF and National Treasury have previously found that the G2G framework distorted market competition, concentrating procurement among the three largest oil marketing companies chosen on a liquidity basis, and giving five major banks outsized influence over dollar allocation.
Administrative proceedings have been initiated against Joseph Wafula, Deputy Director of Petroleum, and Joel Mburu, KPC's Supply and Logistics Manager. Investigative agencies effected the arrests of the principal officeholders on Thursday, 2 April 2026.
The Alleged Scheme
Thenotice states that primary duty bearers responsible for administering the petroleum supply chain may have manipulated data on in-country fuel stocks to exploit rising global prices and public anxiety, thereby creating a false impression of an impending supply shortfall. The manipulated figures were then used to trigger the irregular procurement of an emergency fuel cargo by the Ministry of Energy and Petroleum, procured in blatant breach of the G2G framework, at a price significantly above contracted rates, and of substandard quality.
The shipment, carried aboard the vessel MV Paloma, is believed to have docked at the Port of Mombasa between 27 and 29 March 2026. Detectives suspect the cargo entered the Kenyan market outside the G2G importation framework. Preliminary findings indicate the fuel originated from Saudi Aramco before being sold to a separate international firm and allegedly redirected through a local Kenyan importer.
Quality tests conducted by a KPC quality assurance manager found the consignment contained elevated sulphur levels, rendering it non-compliant with Kenyan fuel specifications. The manager declined to authorise discharge of the shipment and escalated the matter, triggering internal pressure and disagreements before investigators were brought in. That escalation is credited with initiating the Thursday night operation, during which investigators searched the homes of the detained officials and recovered documents and cash.
The government has characterised the conduct as a serious breach of public trust that may constitute economic crimes under the Anti-Corruption and Economic Crimes Act (Chapter 65, Laws of Kenya) and the Penal Code (Chapter 63, Laws of Kenya). All governance actors within the petroleum sector have been directed to provide full access to information to facilitate the investigations.
Supply Position and Pricing Outlook
The government maintains that fuel supply is currently stable, underpinned by the continued performance of contracted G2G suppliers: Aramco Trading Fujairah, ADNOC Global Trading Ltd, and Emirates National Oil Company Singapore Pte Limited, none of whom has declared an inability to meet contractual obligations. Kenya holds approximately 16 days of petrol cover and 19 days of diesel, with jet fuel and kerosene reserves at around 49 days.
The current pricing cycle, running from 15 March to 14 April 2026, is not expected to be affected, as the relevant product was delivered before the escalation of Middle East tensions. However, the government has acknowledged that pump prices are likely to come under pressure from mid-April. Energy Cabinet Secretary Opiyo Wandayi separately ordered oil marketing companies to release any fuel they may be withholding from the public, warning that hoarding constitutes a breach of licensing obligations.
G2G Framework Under Scrutiny
Kenya established the G2G petroleum import arrangement in 2023, following severe fuel shortages in 2022 that produced long queues at filling stations and raised public safety concerns. The framework, backed by sovereign guarantee and a 180-day credit facility, was designed to stabilise supply against global price volatility and ease the acute foreign exchange pressure of 2022 and 2023. The programme has been extended to 2027/2028.
The arrangement has nonetheless faced structural criticism. The government is understood to be considering a phased wind-down, with a portion of procurement shifting to an open tender system.
The scandal arrives at a particularly sensitive moment. Global oil prices are climbing on the back of the Middle East conflict, Kenya faces a looming fuel price review in April, and public confidence in the institutions responsible for supply security has taken a direct hit. Investigative agencies will continue their inquiries, the government said, with irregular shipment requisitions to be reversed and realigned with the contracted G2G framework.
