Petroleum procurement in Kenya is a politically sensitive, economically central and nationally strategic enterprise
Corruption-related arrests make headlines in Kenya, but they hardly result in convictions, and on the rare occasion when they do, they ironically generate tonnes of public sympathy.
Already, there is veritable applause for presidential decisiveness over the arrest and forced resignations of one principal secretary and two chief executive officers of State corporations over irregular oil importation.
Four offences are alleged to have been committed: the first, lying about the amount of oil reserves Kenya had in the context of the ongoing war between the United States, Israel and Iran; second, engineering the purchase of emergency oil supplies outside the procurement framework; third, paying a higher price for the supply than would have been the case ordinarily; and fourth, failing to ascertain the quality of the imported product.
Even as public assurances were being given that there was enough supply, two companies were allowed to bring in fuel at three times the fixed cost agreed under the Government-to-Government framework. A single delayed cargo, enough to service the country’s petroleum needs for nearly a week, was all it took for the nerves of State bureaucrats to begin fraying.
Public anxiety
Experienced bureaucrats know that a crisis is the best time to make money from the government.
The statement from Kenya’s Head of Public Service suggests that stock data may have been manipulated to create the impression of impending shortages, heightening public anxiety, and thus necessitating the procurement of emergency supplies procured outside the established G2G framework at inflated prices and inferior quality.
This was not merely dirty fuel; it may also have been a Sh3 billion lesson in how a crisis can be turned into cash. A niggling question will remain: what has happened to the adulterated fuel?
Oil is the bloodstream of Kenya’s daily existence. Every rise in fuel pump prices translates into matatu fares, food costs, school transport and the intimate arithmetic of survival. Tampering with this sector disorganises the emotional weather of the country.
The search for stability and predictability is what powered the Government-to-Government fuel arrangement introduced in 2023 to end the monthly scramble for dollars and thus cushion the country from foreign exchange turbulence.
The Treasury and the Central Bank do not write out cheques to oil-producing countries; the Ministry of Energy and Petroleum, the Kenya Pipeline Company and the Energy and Petroleum Regulatory Authority make the purchases from State-owned enterprises in Saudi Arabia, Abu Dhabi and Dubai.
Petroleum procurement in Kenya is a politically sensitive, economically central and nationally strategic enterprise. It touches Treasury, foreign exchange policy, diplomatic relations, regulatory approvals, quality assurance, logistics, and, inevitably, the inner sanctum of Executive power. Yet, only three scalps are being presented while the deeper architecture remains untouched. The resignations, then, are politically useful because they compress a structural problem into a moral drama of personal guilt.
On this, the government must do better through the public release of documentary evidence.
Easter is traditionally a fitting time for blood sacrifices of highly visible figures. The resignations and expected court arraignments next week are dressed in the emergency overalls of accountability, but beneath them is the well-tailored sartorial elegance of damage control. There is a dark irony at the centre of the unfolding drama in the person of Joe Sang, managing director of Kenya Pipeline Corporation.
Procurement malpractice
Eight years ago, in 2018, Mr Sang was arrested late at night over the Sh2 billion Kisumu oil jetty scandal. Then, as now, he stepped aside from his role as managing director at KPC. It was followed by a court appearance, which evolved through mentions and adjournments until his acquittal four years later. The offence may have been procurement malpractice, but the greater scandal was a prosecution that took four years to discover it had no case.
Time has always been a loyal ally of scandal in Kenya. The very system that had marched Mr Sang and his co-accused into the dock reopened its doors to him to resume his post as managing director at Kenya Pipeline Corporation.
Mr Daniel Kiptoo Bargoria, the chief executive of EPRA, has stood before the bar of public outrage before and walked away legally unscathed when Busia Senator Okiya Omtatah sought to have him cited for contempt because of adjusting fuel prices in spite of an explicit court order. Principal Secretary Mohammed Liban allowed Oryx Energies — named as one of the importers in the current case — to invoice for oil in 2023 at a higher rate than expected.
It is telling that none of them previously saw it fit to resign, but have found sufficient conscience to do so now. There is a quiet understanding among public officials that leaving in disgrace does not shut the side entrance for re-entry once the public mood has shifted to the next outrage.
Despite the elaborate architecture of vetting, public appointments are subordinate to political loyalty. Acquittal equals absolution, and there is a dominant insistence that indictment is no bar to holding public office if all avenues of appeal have not been exhausted. In fact, it is generally understood that being arrested for a corruption offence in Kenya is the launchpad for a successful political career.
The government says that investigations are still under way. The quality of those investigations is what will determine whether indeed there is a scandal or not, how deep it goes, and who should bear responsibility.
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The writer is a board member of the Kenya Human Rights Commission and writes in his individual capacity. @kwamchetsi; [email protected]
