Three senior government officials resigned following their arrest over an alleged irregular fuel procurement deal that is now under investigation for possible economic crimes.
In a statement issued by Head of Public Service Felix Koskei, the government said the controversy stems from the manipulation of national fuel stock data, which created a false impression of an impending shortage.
The officials who have stepped down include Principal Secretary for Petroleum Mohamed Liban, Managing Director of Kenya Pipeline Company Joe Sang, and Director General of the Energy and Petroleum Regulatory Authority Daniel Kiptoo Bargoria.
Administrative actions have been initiated against Joseph Wafula (deputy director of Petroleum) and Joel Mburu (supply and logistics manager).
According to the government, the alleged falsification of fuel stock data led to the procurement of an emergency fuel shipment at inflated prices and outside the established Government-to-Government (G2G) fuel supply framework.
The cargo is also reported to have been of substandard quality.
Authorities say the G2G arrangement, introduced in 2023, has ensured stable fuel supply and shielded Kenya from global market shocks, including disruptions linked to geopolitical tensions in the Middle East. Key international suppliers under the framework have continued to meet their contractual obligations without interruption.
However, the government now believes certain officials exploited public anxiety over global fuel prices by misrepresenting stock levels, triggering unnecessary emergency procurement in violation of established procedures.
The matter has been escalated to investigative agencies, with authorities warning that such actions may constitute offences under the Anti-Corruption and Economic Crimes Act and the Penal Code.
Additional administrative action has also been initiated against other officers within the petroleum supply chain, including a deputy director in the State Department for Petroleum and a supply and logistics manager at the Kenya Pipeline Company.
The government has vowed full accountability, stating that any individuals found culpable of economic sabotage will face firm legal consequences.
Investigations are ongoing, with further updates expected as authorities seek to reverse irregular transactions and restore compliance with the G2G framework.
The three spent their second night in custody.
It is not clear if they will be released pending the probe.
The Board of Directors of the Kenya Pipeline Company appointed an acting Managing Director following the arrest and subsequent resignation of Sang.
The board said it had named Pius Mwendwa (GM-Finance) as acting MD adding it had taken note of the ongoing reports and developments affecting Sang and
others.
Sang and 15 other officials serving in the Government to Government oil deal were arrested for questioning following revelations there were plans to import substandard fuel into the country.
Those arrested were officials in the Government-to-Government oil deal that had been launched in 2023.
This comes as the country is staring at a spike in fuel prices, as the effects of the war in the Middle East begin to bite.
For now, authorities maintain that supply remains stable.
Kenya launched the deal with gulf companies-Saudi Aramco, ADNOC, ENOC to provide a 180-day credit plan for fuel imports to stabilize the shilling, reduce dollar demand and secure supply chain.
Extended to 2027/2028, the deal has cushioned Kenya from price shocks amid criticism.
Current stock levels stand at 16 days for petrol, 19 days for diesel, and 49 days for jet fuel and kerosene, providing short-term cover as additional shipments arrive in April.
“Our suppliers, especially the ones we have a G2G arrangement with, are actually loading from other areas that are not affected like Europe and India,” National Treasury and Economic Planning Cabinet Secretary John Mbadi stated.
As global oil prices climb amid the evolving conflict in the Middle East, the government now concedes that by mid-April, fuel prices are likely to come under pressure.
Mbadi, however, said resources will be deployed to soften the blow and cushion consumers, but only for a limited time.
“The current fuel pricing cycle, March 15, 2026, to 14th April 2026, is not likely to be affected since the product concerned was delivered prior to the Middle East conflict,” said Mbadi.
The government, however, says that about Sh17 billion currently held in the stabilization fund under the Petroleum Development Levy will be deployed to stabilise pump prices and partially shield consumers from sharp increases for the next three months.
The government is also considering altering the application of VAT on fuel, to a fixed amount per unit to keep the prices lower that would be.
“If, for example, the price was to increase by about Sh60, especially diesel, which is the most significant for our economy, if it was to increase by Sh60 per litre, if you take off VAT, then that comes down to about Sh51, then that Sh51 we bring in the stabilisation fund and try to moderate it. I may not go into the details of how much we are trying to cover with the stabilisation fund because again, it is the responsibility of EPRA to announce the prices,” said Mbadi.
President Ruto warned on March 30 that the ongoing conflict in the Middle East is exerting pressure on the global economy, with ripple effects already being felt across supply chains and national economies, including Kenya. He said the government has remained vigilant over the past month, closely monitoring developments and relying on continuous assessments from key ministries and agencies.
Ruto revealed that he received a comprehensive briefing from the Ministries of Energy, Agriculture, Trade, the National Treasury, the Central Bank, and private sector players on the evolving geopolitical situation and its potential economic implications.
He noted that while the full impact on fuel prices is still under assessment, measures are being put in place to cushion Kenyans from adverse effects and ensure stable supply.
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