How Sh8b dirty fuel flagged for rejection beat the system, entered pipeline

A fuel attendant fuels a vehicle at a petrol station. [File, Standard]

When the oil tanker MT Paloma slipped into its berth at the Port of Mombasa on the evening of March 27, flying a Marshall Islands flag, few Kenyans knew that it was carrying more than just 60,200 metric tonnes of petrol. It was carrying the blueprint for a breathtaking daylight heist on Kenya’s motorists.

A confidential cache of invoices exclusively obtained by The Standard reveals that One Petroleum Limited, the Mombasa-based company that imported the controversial cargo, billed Kenya’s leading oil marketers Sh8,081,359,678.81 for a single day’s supply of Premium Motor Spirit (PMS).

On April 7, Energy Cabinet Secretary Opiyo Wandayi stood before the nation and issued a firm directive. One Petroleum Limited was to remove its controversial fuel consignment from the country immediately. Oil marketers were ordered not to pay the invoices and the company was directed to withdraw all bills and issue credit notes instead.

Yet, The Standard can today exclusively reveal that One Petroleum had already issued at least 57 invoices to oil marketers on March 28, barely a week before the government’s ban and a full ten days before Wandayi’s order.

The invoices were sent while the government was still publicly insisting the fuel would not enter the market. A scan through the documents reveals that Astrol Petroleum Company Limited was invoiced Sh345,013,430.33 for 1,735 metric tonnes. Galana Energies Limited received a bill for Sh255,528,678.94 for 1,285 metric tonnes. Lake Oil Limited was billed Sh260,301,199.02 for 1,309 metric tonnes.

Vivo Energy Kenya was asked, through multiple invoices, to pay more than Sh2.24 billion, including two for Sh735,763,511.36 each. TotalEnergies Marketing Kenya was billed Sh618,439,059.55 on no fewer than three separate invoices amounting to over Sh1.85 billion.

Petro Oil Kenya Limited received a single invoice for Sh429,526,806.63 while Rubis Energy Kenya was presented with two invoices, each for Sh607,104,324.37, totalling over Sh1.21 billion.

The pricing is the most visible detail of the oil deal. According to Wandayi, the consignment was invoiced at approximately Sh198,000 per metric tonne, compared to Sh140,000 per metric tonne under Kenya’s Government-to-Government (G-to-G) fuel import arrangement.

“This consignment is priced at Ksh198,000 per metric tonne, an increase of Ksh58,000 per metric tonne, which would result in an approximate rise of Ksh14 per litre in pump prices on this consignment alone,”  Wandayi stated.

On a 60,000-metric-tonne cargo, the overcharge totals approximately Sh3.53 billion. The total value of the MT Paloma consignment has been estimated at up to Sh11.88 billion.

Wandayi’s April 7 directive was direct, saying, “One Petroleum is directed to exit this product out of Kenya as soon as possible. Oil marketers should neither pay the invoice nor uplift product from this consignment.” 

The Cabinet Secretary further ordered One Petroleum to “withdraw all invoices issued and replace them with credit notes sent to oil marketing companies”. The Energy and Petroleum Regulatory Authority (Epra) was instructed to exclude the shipment from monthly fuel pricing calculations.

One Petroleum publicly complied. In a statement dated April 7, the company said: “Following consultations with the Government, One Petroleum Limited confirms that it has forthwith taken steps to ensure that the petroleum cargo that was brought in on March 27, 2026, via MT Paloma does not enter the Kenyan market”.

But the invoices dated March 28  had already been issued. And the fuel, as subsequent investigations have revealed, had already been released.

In contradiction to the government’s public assurances, Kenya Pipeline Company (KPC) acting Managing Director Pius Mwendwa later told the Senate Energy Committee that the MT Paloma fuel was already in the market.

“We received the consignment on March 27, 2026, but after measuring it, we realised there were high levels of sulphur. It had a sulphur content of 43ppm against the requirement of 10ppm,” Mwendwa told senators.

Despite failing quality tests, the fuel was allowed into the country’s distribution system following a waiver granted by Trade Cabinet Secretary Lee Kinyanjui. Documents tabled before the committee showed a letter dated March 28, 2026,  the very same day One Petroleum issued its invoices from Kinyanjui to Wandayi, directing that the substandard petrol be blended with existing stocks to dilute excessive manganese and sulphur levels.

“The Premium Motor Spirit (PMS) onboard MT Paloma is being blended with the current stock to mitigate excess manganese,” read Kinyanjui’s letter.

The fuel was allowed into the KPC system and later released to oil marketing companies. Oil executives have since told The Standard that the cargo was already mixed with previous stocks in KPC’s pipelines, casting doubt on the State’s order to recall it.

“KPC does not segregate fuel at the discharge point. The product is stored separately for each grade (petrol, diesel and dual-purpose kerosene),” said one executive who spoke on condition of anonymity.

“We do not have dedicated tanks where KPC stores different cargoes of the same grade; it is all discharged into the system and thus mixed. One Petroleum can’t retrieve the fuel that they supplied.”

One Petroleum has defended its role, insisting it acted in good faith following a formal government request. “In March, One Petroleum Limited was one of four bidders that successfully responded to an emergency request issued by the Kenya Ministry of Energy and Petroleum,” the company’s statement read.

On March 25, former Petroleum Principal Secretary Mohamed Liban wrote to One Petroleum director Ali Balala, granting permission to import 60,000 tonnes of petroleum with a 10 per cent leeway, meaning up to 66,000 tonnes could be brought in.

But the timeline has raised serious questions. The MT Paloma docked at the Port of Mombasa between March 27 and 29. That is a mere two to four days after the letter was written-a logistical impossibility unless the deal was pre-arranged.

The Directorate of Criminal Investigations (DCI) has since widened its probe and at the centre of the storm is Mohamed Jaffer, the reclusive Mombasa billionaire who owns One Petroleum. Jaffer is among the top oil sector executives summoned by the DCI over the multimillion-shilling saga that has already seen senior energy officials resign.

“Statements have been recorded from possible witnesses and several persons of interest, including senior government officials and executives of One Petroleum Limited. The investigators have also summoned Oryx Energy Limited executives for statement recording,” the DCI said. 

The DCI has further clarified that the recent resignations of key officials do not absolve them or any other suspects from prosecution. “Resignation from office does not in any way exonerate or absolve the suspects and persons of interest from criminal culpability,” the agency stated, urging those under investigation to fully cooperate with investigators.

“The DCI is actively liaising with relevant government agencies and investigative agencies in other countries under the Mutual Legal Assistance program to establish all relevant facts surrounding this matter. We are doing everything possible to deal with this matter expeditiously and will forward the file to the Office of the Director of Public Prosecutions in due course. Those found culpable will be dealt with firmly in accordance with the law, regardless of their positions, including the directors of the companies involved,” the agency said 

The Senate has widened its probe, summoning directors of One Petroleum and former senior government officials to testify. The five suspects could be charged with economic sabotage, arising from accusations of collusion to import fuel with excess sulphur levels against the Kenya Bureau of Standards requirements.