ADVERTISEMENT It began with a simple request born of desperation. As petrol stocks threatened to run dry by April 4 amid global supply jitters linked to the Iran conflict, Kenya turned to its neighbour for help. Officials asked Uganda to release some of its transit fuel held in the Kenya Pipeline Company (KPC) network to bridge the gap for local oil marketers.
Kampala said no. Citing risks to its own supplies, Uganda — which owns a lucrative 20.15 percent stake in KPC worth over Sh20 billion and enjoys significant influence over pipeline operations — declined the appeal outlined in a confidential memo from former Petroleum Principal Secretary Mohamed Liban.
That rejection set off a chain reaction. Instead of waiting for regular Government-to-Government shipments already en route from the Gulf, the Ministry of Energy rushed through an emergency tender on March 18. One week later, on March 25, contracts worth Sh11.88 billion were awarded to One Petroleum and Oryx Energies for 81.3 million litres of petrol each.
One Petroleum, associated with Mombasa tycoon Mohammed Husein Jaffer, delivered its 60,000-tonne cargo aboard the MT Paloma at the end of March. The price tag: Sh198,000 per metric tonne — nearly 40 percent higher than the Sh140,000 rate under standing contracts with Saudi Aramco, ADNOC and ENOC, which were still meeting their obligations.
The move quickly unravelled. Energy Cabinet Secretary Opiyo Wandayi labelled the One Petroleum consignment “illegal,” warning it would have driven up pump prices by as much as Sh14 per litre from mid-April. He ordered the entire cargo removed from KPC tanks and barred marketers from lifting or paying for the product. One Petroleum confirmed it would comply and prevent the fuel from entering the market, while Oryx Energies was stopped from discharging its shipment.
Consequences followed swiftly. Over the weekend, former Petroleum Principal Secretary Mohamed Liban, EPRA Director-General Daniel Kiptoo and KPC Managing Director Joe Sang resigned after being arrested. The scandal has drawn fresh scrutiny over claims of manipulated shortage data used to justify the premium-priced emergency deal despite available regular supplies.
Critics see echoes of past fuel controversies in Kenya, where declarations of urgency have sometimes masked inflated costs and powerful local interests. The episode has left banks cautious about future financing and motorists wondering who ultimately bears the cost of such disruptions.
As President William Ruto’s government renews its pledge to break up fuel cartels, this Uganda-triggered saga offers a stark test. When Kampala refused to help, Kenya’s energy headache did not ease — it intensified, exposing once again the fragile underbelly of the country’s petroleum supply chain.
