Kenya failed to block bad petrol in high-seas drama

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Before the arrest of senior State officials in the energy sector over contested fuel cargo, Kenyan authorities tried unsuccessfully to block a ship carrying 60, 000 tonnes of petrol from docking at the port of Mombasa.

The State alleged that the emergency shipment was overpriced, of substandard quality, and procured at rates significantly higher than those agreed under existing deals.

A confidential letter shows that the owners of MT Paloma, the ship carrying the fuel, arrived at the outer limits of the port of Mombasa on March 27 at 2:30am and requested clearance to enter the port’s precincts.

It was denied entry as answers were sought from top officials on why they allowed importation of fuel outside the government-to-government arrangement inked with top Middle East firms.

Kenya Ports Authority (KPA) was under clear instructions not to allow MT Paloma to dock at the port and discharge its cargo at Kipevu.

This prompted the owners of MT Paloma to fire a terse legal warning to KPA, warning the State agency that it will be held directly responsible for the Sh11.8 billion cargo, documents tabled in the Senate following a probe on the condemned fuel show.

“This is to inform you that we must hold you responsible for the following facts and all consequences arising thereof. Customs clearance was requested at the time of tendering notice of readiness at 02;30 hours local time on March 27, 2026,” says the letter fired to KPA and signed by Captain Cosmin Sarla on behalf of MT Paloma.

“Customary or not and through no fault of my vessel or her owners or her agents or her agents, customs clearance has not been granted promptly on arrival at the time of my tendering of notice of readiness.”

The vessel warned KRA it will escalate its protest letter to a multi-billion shilling legal battle.

“On behalf of my principals, we reserve the right to extend or modify this protest at a future time and place,” said the protest note seen by the Business Daily.

The ship was allowed to dock following high-level discussions that involved top civil servants, sources familiar with the matter said. It docked at berth No.1 at the Kipevu Oil Terminal 11 (KOT 11) on March 27 at 8:42pm, revealing a 12-hour delay in response to the high-stakes fight in the high seas.

Upon arrival within the outer limits of the port of Mombasa, ships are issued with customs clearance and permission for their crew to discharge cargo at the port, in what is technically referred to as free pratique in the shipping industry.

Free pratique is official permission given by a port health authority for a ship, aircraft, or vehicle to enter a port, disembark people, and load or unload cargo after certifying it is free of contagious diseases.

Without it, a vessel faces quarantine restrictions.

MT Paloma completed discharging the 60,200.813 metric tonnes of petrol on March 30, 2026 at 12.12pm.

This triggered a series of coordinated police raids targeting the highest echelons of Kenya’s energy sector.

By dawn of April 3, three of the most powerful men in the country’s energy sector were in police custody as detectives raced to unravel what the officials termed the worst white-collar crime in the petroleum market.

They all subsequently resigned on April 4.

The three, including former Principal Secretary for Petroleum Mohamed Liban, former Kenya Pipeline Company (KPC) CEO Joe Sang and former director-general of the Energy and Petroleum Regulatory Authority (Epra) Daniel Kiptoo, were released on cash bail after spending days in the police cells.

The government said the three were at the heart of a scheme that manipulated data used to justify the emergency importation of fuel, despite standing contracts with Saudi Aramco Trading Fujairah, Abu Dhabi’s ADNOC Global Trading Ltd, and Emirates National Oil Company Singapore Ltd., arguing that the firms were all meeting their contractual obligations.

Parliament has issued a 60-day ultimatum to the investigators to submit a report on the outcome of the probe of the three senior officials in the energy sector arrested in April.

One Petroleum was tapped alongside Oryx Energies to supply the emergency stock of petrol in the wake of a decision by Kenya’s top security organ, the National Security Council Committee (NSCC), to import the backup cargoes of petrol.

At the time, a vessel carrying 85,000 metric tonnes of petrol belonging to Gulf Energies got stuck at the port of Jebel Ali in the wake of Iran’s closure of the Strait of Hormuz.

One Petroleum and Oryx Energies were on March 25 awarded the contracts to ship in 81.3 million litres each of petrol in deals that would later trigger the fall-out and the resignations and arrests of the three top officials in the country’s energy sector.

Hass Petroleum and E3 Energy also placed tenders for the emergency stocks.

Importation of the emergency cargo was sanctioned by NSCC on March 9.

One Petroleum said that it secured the vessel within three days of the award of the deal from BP International, one of its trading partners. The cargo was originally destined for Angola.

But the consignment did not meet the Kenyan specifications on the oxygenate, manganese, Sulphur and benzene content in petrol, prompting One Petroleum to seek a waiver from the Ministry of Energy and Petroleum.

On April 4, Head of Public Service Felix Koskei said that data on fuel stocks had been falsified to trigger importation of emergency stocks, days after MT Paloma discharged the fuel into the network of KPC.

The State then directed One Petroleum to recall the product, a move that industry executives said was not feasible given that it had already been discharged into KPC’s system and mixed with other stocks.

One Petroleum said that it had not initiated litigation against the State for the botched deal despite incurring losses running into millions of dollars.

But Oryx threatened to sue, saying that the State breached contractual agreements, exposing it to significant financial losses and reputational damage.

Oryx wrote to the government on April 9, notifying it of the need to take the consignment as agreed failing which this would translate to a contractual breach and trigger lawsuits.

“The company reserves all rights arising from the cancellation while remaining willing to engage constructively with the Ministry of Energy and Petroleum,” Oryx said in documents tabled before the Senate.

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Reporting originally appeared via Business Daily. Read the full source for additional context.