Not off the hook Senators press for conclusion of probe into top energy chiefs

Former Petroleum PS Liban Mohamed, former KPC MD Joe Sang and former EPRA boss Daniel Kiptoo. [File, Standard]

Senior government officials who came under fire and some lost their jobs over allegations of importation of substandard petroleum products into the country may not be off the hook yet, with the Senate now calling for speedy investigations into their conduct.

The Senate Committee on Energy has, in a new report told the Ministry of Energy and Petroleum, alongside other State agencies including the Directorate of Criminal  Investigations and the Ethics and Anti-Corruption Commission (EACC), to expedite the investigations into the officials. The Senators want the investigations, which have dragged since April, to be concluded within two months.

Former Petroleum Principal Secretary Liban Mohamed, former Kenya Pipeline Corporation (KPC) Managing Director Joe Sang and former Energy and Petroleum Regulatory Authority (EPRA) Director General Daniel Kiptoo were arrested and later resigned from office following allegations of irregular importation of petroleum products that were also found to be substandard.

The three senior executives had procured emergency fuel cargoes following concerns of possible stock outs after a ship that had been destined for Kenya failed to pass through the Strait of Hormuz following the blockade of the strait due to the attacks on Iran by the US and Israel.

The officials had reportedly relied on information from a March 18 meeting by the Vessel Alignment Committee which determined that super petrol stocks in the country at the time were low.

The meeting had noted that the failure by the vessel MT Elka Apollon to transit through the Strait of Hormuz meant that the next scheduled cargo was not expected to arrive in Mombasa until between April 3 and April 5, 2026, which would have been too late.

Anticipating a potential fuel supply shortfall, the Energy and Petroleum Ministry decided to import emergency cargoes.

On March 19, the Ministry invited four bidders – One Petroleum Ltd, Hass Petroleum, E3 Energies and Oryx Energies – to submit proposals for the delivery of fuel that would shore up the stock levels and shield the country from outages in the following weeks. One Petroleum and Oryx Energies were selected to import 60,000 metric tonnes of super petrol each as a contingency cargo to shore up the national stocks.

One Petroleum managed to bring in the cargo aboard the MT Paloma but the fuel was however found to have higher sulfur content than what is allowed by Kenyan standards and was later withdrawn, according to the Ministry of Energy and Petroleum.

The fuel had a sulfur content of 43 parts per million (PPM) against the Kenyan standard of 10 parts per million. The Ministry of Trade and Industry has since relaxed the standards to 50PPM to later issue an exemption to allow the vessel to discharge.

The tenders were cancelled before the cargo procured by Oryx Energies had been discharged into Kenya's fuel storage systems.

In addition to overseeing the importation of substandard fuel, the senior ministry officials were also accused of manipulating industry data and projecting the supply situation as dire while in reality the country had adequate stocks.

After the night raids at their homes and offices and arrests of Liban, Sang and Kiptoo on April 2, different State officials including the Energy and Petroleum Ministry Cabinet Secretary Opiyo Wandayi and  President William Ruto’s Chief of Staff and Head of Public Service Felix Koskei said the there had been adequate fuel stocks in the country and that the Ministry did not need to import emergency cargoes.

Koskei said the matter had been escalated to investigative agencies for a “full and comprehensive inquiry”.

More than four months later, Liban, Sang and Kiptoo have not been formally charged in court. They were released from police custody after paying a police cash bail. Other officials that were implicated included Joseph Wafula, former Deputy Director of Petroleum and Joel Mburu, former Supply and Logistics Manager, KPC.

The Senate Committee on Energy now wants the Ministry of Energy and other agencies to conclude their investigations on the senior officials within two months.

“Any ongoing administrative, disciplinary, or criminal proceedings involving the said officers be concluded expeditiously, but without prejudice to due process, including the right to a fair hearing and impartial determination,” said the Committee in the report.

“Accordingly, the Committee recommends that the Ministry of Energy and Petroleum, the Public Service Commission, the State Corporations Advisory Committee, the Boards of Epra and the Kenya Pipeline Company, together with all relevant investigative agencies, submit a consolidated status report to the Senate within 60 days of adoption of this report detailing the progress, findings and outcomes of all investigations and disciplinary proceedings relating to the affected officials.”

The Committee had been undertaking an inquiry into irregularities in the country's petroleum supply chain that resulted in the crisis in late March and April and exposing Kenyans to supply and price shocks.

In the report, the Senators said they had opted to defer looking into the conduct of the senior officials to give the investigative agencies time to conclude their probe but gave them two months to conclude the investigations.

“Acknowledging the ongoing investigations by the DCI and EACC, the Committee resolved to defer consideration of matters relating to individual culpability, disciplinary  action, or possible criminal conduct... involving key officials such as the Principal Secretary for Energy and Petroleum, the Managing Director of KPC and Director General of Epra, pending the conclusion of the investigations and the submission of findings by the relevant agencies,” said the Committee.

It however noted that this pause was “with the inclusion of a defined timeline of two months within which the relevant agencies should conclude investigations and submit their findings to enable the Committee to consider the matter further.”

The inquiry by the Committee has also exposed major flaws in the country’s petroleum sector that are now exposing consumers to supply and price shocks.

In the report, the Committee noted that there are significant structural, regulatory and governance weaknesses that characterise Kenya’s petroleum supply chain, which has over the years seen the sector grapple with major crises that are never fully resolved. 

The crisis that unfolded in March, the report noted, was due to failure by the Ministry of Energy to have in place mechanisms to provide for the emergency importation of fuel in case of crises.

The Ministry and other energy sector agencies also lack clear and coordinated communication strategy during a crisis, according to the report, which results in panic among Kenyans.

“Although undertaken in response to exceptional circumstances, the process raised concerns regarding procedure, due process, competition, transparency, documentation, accountability and institutional coordination,” said the Senate Committee about the emergency imports, further noting that the Ministry had failed to put in place adequate mechanisms for real-time monitoring of petroleum stocks and supply chain risks.

While acknowledging there are instances that may necessitate emergency imports and even waivers on quality such as the one given by the Ministry of Trade and Industry, the senators there should be mechanisms that guide such procurement.

“The committee nevertheless noted the need for clearer protocols governing the invocation, implementation and oversight of regulatory waivers during emergencies, together with enhanced inter-agency accountability in the management of fuel quality incidents,” reads the report in part.

The Senators also called out the Ministry of Energy and Petroleum for failure to put in place strategic petroleum reserves despite having knowledge of the need to have such capacity for decades.

The government has had plans to set up strategic reserves for years but failed to implement such a framework, leaving the country vulnerable to shocks with the current storage systems being able to hold stocks that can only last the country a few weeks.

“The inquiry also underscored the country's vulnerability to external supply shocks and highlighted the inadequacy of existing strategic petroleum reserve capacity,” said the committee, noting that while the government has been able to maintain short-term supply stability, the current storage infrastructure and prevailing stockholding requirements are insufficient to provide long-term resilience against prolonged geopolitical disruptions or global market volatility.

The committee recommended that the government equip National Oil Corporation (NOCK) with capacity to implement strategic petroleum reserves.

“The government prioritises the restructuring, recapitalisation and strengthening of the NOCK as the country's strategic national petroleum entity, with a clear mandate to support national energy security objectives.  In particular, NOCK should be empowered to play a central role in the acquisition, management, and maintenance of strategic petroleum reserves, including the development and operation of strategic storage infrastructure either independently or through public-private partnerships,” said the Committee, giving the Energy Ministry six months to submit a comprehensive progress report to the Senate on how it plans to strengthen NOCK.

The Ministry will then be required to to develop a framework on the set up of strategic petroleum reserves within one year

“The Ministry of Energy and Petroleum, in consultation with the National Treasury and other relevant agencies, develop a framework within twelve (12) months of adoption of this report for the phased establishment of a national strategic petroleum reserve policy anchored on NOCK, with the long-term objective of achieving strategic petroleum reserves  equivalent to at least six months of national consumption,” said the Committee.

“The framework should provide for sustainable financing mechanisms, stock rotation arrangements, governance safeguards, and clear accountability measures to ensure operational efficiency and transparency.”