Energy Ministry Halts Payment for Controversial Fuel Consignment

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NAIROBI, Kenya, Apr 7 – The government has ordered One Petroleum Ltd to withdraw a controversial fuel consignment linked to the ongoing probe into an alleged artificial fuel shortage that has already seen senior energy officials arrested.In a statement, Cabinet Secretary Opiyo Wandayi directed the company to immediately cancel all invoices issued to oil marketing firms and instead issue credit notes for the disputed cargo.Wandayi also instructed Oil Marketing Companies (OMCs) not to pay for or uplift the product, warning that the shipment would introduce an additional cost burden of about Sh14 per litre to consumers.At the centre of the dispute is a 60,000-metric-tonne consignment of Super Petrol imported outside Kenya’s Government-to-Government (G-to-G) fuel supply framework. The cargo was priced at KSh 198,000 per metric tonne—significantly higher than the KSh 140,000 benchmark under the G-to-G arrangement.According to the Ministry of Energy, the price difference of KSh 58,000 per metric tonne would have disrupted the country’s fuel pricing structure and undermined gains made in stabilizing pump prices.“The importation was done in contravention of established procedures under the G-to-G framework and posed a risk to supply stability and pricing integrity,” the statement said.Under fresh directives, One Petroleum Ltd has been ordered to remove the product from the Kenyan market and facilitate its export as soon as possible. Meanwhile, the Energy and Petroleum Regulatory Authority (EPRA) has been directed to exclude the consignment from monthly fuel cost calculations.Kenya adopted the G-to-G fuel import arrangement in March 2023 through agreements with global suppliers, including Aramco Trading Company, ADNOC Global Trading Limited, Emirates National Oil Company, and Fujairah FZE.The framework has since played a critical role in ensuring steady fuel supply, maintaining price stability, and easing pressure on foreign exchange reserves.Officials say the system has become even more vital amid rising global fuel premiums driven by geopolitical tensions, particularly in the Middle East.The latest directive comes as investigations intensify into suspected manipulation of fuel supply chains, with the government warning that it will take firm action against any individuals or companies found culpable.“The Government will remain vigilant to ensure that no stakeholder engages in artificial shortages or unjustified price increases,” Wandayi said.He reaffirmed the State’s commitment to transparency, accountability, and stability in the petroleum sector, assuring both local and international partners of continued adherence to contractual obligations under the G-to-G framework.