Swiss oil trader threatens suit after Kenya blocks fuel imports
A Swiss oil firm has escalated its dispute with the Kenyan government after authorities rejected a second consignment of imported fuel, setting the stage for a costly international legal battle.
Swiss-owned Oryx Energies Kenya has formally protested the cancellation of a contract to supply 96,000 tonnes of super petrol, insisting the deal was legally binding and warning of potential litigation against the State.
The dispute stems from a decision by the Ministry of Energy to terminate the fuel import arrangement on March 31, 2026 just days before the first shipment was due to arrive at the Port of Mombasa.
This is the second shipment to be rejected by government after condemning fuel import by One Petroleum Limited.
Authorities also blocked the consignment from entering storage facilities managed by Kenya Pipeline Company.
In a strongly worded response, Oryx rejected the cancellation, arguing that the agreement had been executed through a formal procurement process and could not be unilaterally withdrawn.
“We do not recognise any cancellation, and the purported cancellation is hereby rejected in full,” said CEO Angeline Maangi in correspondence to the Energy ministry.
The firm noted that the abrupt decision had exposed it to significant financial risks, given its contractual obligations to suppliers.
“Your email notification… places Oryx Energies Kenya in a materially difficult commercial and operational position,” Ms Maangi added, signalling possible claims for damages.
The fuel cargo was scheduled in two batches, with the first 36,000 tonnes arriving on April 1 aboard the vessel MT Seaways Milos, while a second shipment of 60,000 tonnes was due days later. However, both consignments were reportedly diverted to Tanzania as the standoff escalated.
The government has defended its decision, saying the imports were procured outside the country’s government-to-government fuel supply framework with Gulf states.
Energy Cabinet Secretary Opiyo Wandayi said the shipments were overpriced and would have driven up pump prices.
Officials also raised concerns about fuel quality, with investigations indicating that the cargo could have exceeded allowable levels of sulphur, manganese and benzene under standards set by the Kenya Bureau of Standards.
The controversy has already triggered arrests of senior energy officials, including former Petroleum Principal Secretary Mohamed Liban, sacked EPRA and Kenya Pipeline Company Director General and Managing Director Daniel Kiptoo and Joe Sang respectively as detectives probe alleged irregularities in the procurement process.
Despite the hardline positions, Oryx has signalled willingness to negotiate.
“We remain open to constructive discussions to confirm a way forward,” the firm said, even as it reserved its legal rights.
The outcome of the dispute could have far-reaching implications for Kenya’s fuel supply chain and investor confidence, particularly as the government tightens control over petroleum imports amid rising scrutiny of emergency procurement deals including shipment by One Petroleum Limited.
