Govt Blocks Sh14 Per Litre Fuel Hike, Orders Withdrawal of Illegal Consignment

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NAIROBI, Kenya, Apr 7 – The government has ordered the immediate withdrawal of an overpriced fuel consignment imported into the country, in a move aimed at protecting consumers and safeguarding the integrity of Kenya’s fuel supply system.In a statement issued Tuesday, Energy Cabinet Secretary Opiyo Wandayi directed One Petroleum Ltd to recall the disputed cargo and issue credit notes for all invoices already sent to oil marketing companies.“Since the successful importation of the first cargo in April 2023, the G-to-G arrangement has served the country effectively, ensuring a stable supply of refined petroleum products both locally and regionally, while supporting foreign exchange stability,” he stated.He further instructed Oil Marketing Companies (OMCs) not to pay for or uplift any product linked to the consignment, warning that the shipment posed a direct threat to fuel price stability.“The arrangement has ensured price stability and the integrity of product quality throughout the supply chain, an outcome that remains especially critical at a time when global petroleum product premiums have more than tripled and continue to rise amid escalating tensions in the Middle East.”At the center of the directive is a 60,000-metric-tonne cargo of Super Petrol imported outside the government-sanctioned framework. The consignment was priced at KSh 198,000 per metric tonne—significantly higher than the Sh140,000 per metric tonne under Kenya’s Government-to-Government (G-to-G) fuel supply arrangement.According to the Ministry of Energy, the price difference of Sh58,000 per metric tonne would have translated to an increase of approximately Sh14 per litre at the pump if allowed into the market.“The importation of this cargo was done in contravention of established procedures under the G-to-G framework and risks undermining a system that has ensured stability in supply and pricing,” Wandayi said.Under the directive, One Petroleum Ltd has also been ordered to export the product out of the country without delay, while the Energy and Petroleum Regulatory Authority (EPRA) has been instructed to exclude the consignment from monthly fuel cost calculations.Kenya entered into the G-to-G fuel import arrangement in March 2023 with international suppliers, including Aramco Trading Company, ADNOC Global Trading Limited, Emirates National Oil Company, and Fujairah FZE. The framework was designed to stabilize fuel supply, manage foreign exchange pressures, and shield consumers from volatile global oil prices.Since its rollout in April 2023, the system has largely ensured consistent availability of petroleum products and predictable pricing, even as global fuel premiums continue to rise amid geopolitical tensions.The latest intervention comes against the backdrop of ongoing investigations into an alleged artificial fuel shortage that has already seen senior energy sector officials arrested and others step aside.Wandayi warned that the government will take firm action against any players found to be undermining the fuel supply chain through unauthorized imports or price manipulation.“The Government will remain vigilant to ensure that no individual or entity engages in artificial shortages or unjustified price increases,” he said.So far, Senior energy sector officials implicated in alleged manipulation of petroleum stock data and irregular fuel procurement are free on Sh100,000 police cash bail, pending further investigations and their expected court arraignment. Multiple sources confirmed the release of the officials after it become apparrent on Tuesday that the Public Prosecutor was yet to approve charges.Those at the center of the probe include former Petroleum Principal Secretary Mohamed Liban, ex-Kenya Pipeline Company Managing Director Joe Sang, and former Energy and Petroleum Regulatory Authority Director General Daniel Kiptoo Bargoria.Wandayi further reaffirmed the State’s commitment to maintaining transparency, accountability, and stability in the petroleum sector, assuring both local and international stakeholders of continued adherence to contractual obligations under the G-to-G framework.The government said it will continue updating the public on fuel prices through the usual monthly review mechanism.