A dispute over an emergency petroleum procurement deal has escalated after Oryx Energies Kenya Ltd told Parliament that a multimillion-dollar fuel supply agreement was abruptly cancelled while shipments were already in transit, intensifying scrutiny of Kenya’s emergency energy procurement framework.
Appearing before the Senate Standing Committee on Energy at Bunge Tower, Nairobi, the company’s Managing Director Angeline Maangi detailed how the firm responded to a government request for fuel supply only for the Ministry of Energy and Petroleum to reverse the decision days later.
“The Company acted at the Government’s request, under extreme market conditions, and with the sole purpose of supporting Kenya’s energy security,” Maangi told senators on Tuesday.
The Senate is investigating the circumstances under which the deal was initiated, approved, and subsequently cancelled, amid concerns over transparency, procurement procedure, and adherence to Kenya’s Government-to-Government (G2G) fuel import framework.
Maangi told the Committee that Oryx received a direct request for proposal from the State Department of Petroleum on March 19, 2026, seeking urgent fuel supplies to cushion the country against global disruptions linked to geopolitical tensions in the Middle East.
“The invitation was communicated directly to the Company’s Managing Director from the official email account of the Principal Secretary,” the submission stated, noting that it was unclear whether other oil marketers had been invited.
According to the firm, it responded within a two-hour window. “We submitted the quotation within the required timeline and confirmed our readiness to perform under the proposed terms,” Maangi said.
By March 25, the Ministry had accepted Oryx’s offer to supply 60,000 metric tonnes of Premium Motor Spirit (PMS).
A further 36,000 metric tonnes was later approved two days afterward, expanding the intended supply.
“Our ability to respond with speed and certainty in conditions of acute market stress is precisely the operational value that an experienced regional operator brings,” the company stated.
However, Maangi told lawmakers that the agreement was abruptly cancelled on March 31, at a time when shipments were already underway.
“The shipment was en route for delivery when the Ministry cancelled the offer,” she said. “By that time, a binding contractual arrangement had already been established through formal correspondence.”
Oryx has since rejected the cancellation and is urging the government to honour what it describes as a binding agreement, warning of significant financial losses.
“As of today, the company has lost USD 25 million in the failed deal,” Maangi told the Committee, adding that the firm had already committed logistical and operational resources in preparation for delivery.
The Senate session saw sharp questioning from legislators over the speed, structure, and legitimacy of the procurement process.
Senator Danson Mungatana raised concerns about the rapid conclusion of the deal.
“Did you talk to your lawyers or consult widely before entering into a contract within two hours?” he asked. “The committee wants to know the role that you played without a physical meeting?”
He also questioned whether the firm was aware of existing supply arrangements. “Would you be comfortable to jump into such an arrangement knowing the existence of government-to-government contracts with Gulf states?” he posed.
Senator Boni Khalwale focused on the financial implications of the cancellation. “Listening to Madam Maangi, the taxpayer wants to know the consequences of the failed contract and who pays you for the loss of money?” he asked.
Senator Allan Chesang Kisang added: “We need to know the cost of missing out on the importation of these petroleum products.”
Maangi defended the company’s actions, saying the communication process was consistent with standard government practice. “It is standard practice that the State Department of Petroleum communicates to oil marketers in this manner,” she said.
She also defended Oryx’s industry experience, stating: “In the 39 years that the company has been in operation, it has built a reputation and is a trusted player as an oil importer.”
The company attributed its pricing—USD 253.94 per metric tonne premium—to global supply disruptions, shipping risks, and elevated insurance costs linked to geopolitical instability.
“This differential reflects prevailing market conditions characterised by acute product scarcity,” the firm said, citing reduced tanker availability and increased war-risk insurance premiums.
It further noted that rerouting shipments via the Cape of Good Hope had added up to two weeks of transit time and significantly raised logistics costs.
“Transit through key routes had significantly reduced, tanker availability dropped, and insurance premiums surged due to war-risk exposure,” the company explained.
Oryx warned that the cancellation could have wider implications for investor confidence in emergency procurement systems.“A framework that invites participation but fails to honour resulting commitments risks eroding the private sector’s capacity to respond,” the company cautioned.
The Senate Committee is expected to continue its inquiry as more stakeholders are summoned to clarify the sequence of approvals, cancellations, and contractual obligations that have placed Kenya’s fuel supply chain under heightened scrutiny.
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