Oryx Energies Kenya Ltd has detailed a multi-million-shilling fuel supply arrangement with the government that was abruptly canceled while shipments were already en route, raising questions in the Senate over emergency petroleum procurement processes.
Managing Director Angeline Maangi told the Senate Standing Committee on Energy on April 14 that the company acted on an urgent request from the State Department of Petroleum on March 19, 2026, to supply Premium Motor Spirit (PMS) amid global supply disruptions linked to the Middle East conflict.
She said the firm submitted its proposal within two hours of receiving the request and was subsequently awarded contracts for 60,000 metric tonnes on March 25, followed by an additional 36,000 metric tonnes two days later, bringing the total intended supply to 96,000 metric tonnes.
Oryx further told the committee that it has so far incurred losses estimated at USD 25 million following the cancellation and has urged the government to honour what it terms a valid contractual commitment.
“As of today, the company has lost USD 25 million in the failed deal,” Maangi said.
Oryx Energies Fuel Supply Deal Canceled While Shipments Were En Route
Maangi said the Ministry canceled the entire arrangement on March 31, even though shipments were already in transit, despite what the company described as a binding contractual agreement.
She told the committee that the deal had been initiated through direct communication with the State Department of Petroleum and executed under extreme market conditions to strengthen Kenya’s fuel security.
“The invitation was communicated directly to the Company’s Managing Director from the official email account of the Principal Secretary,” she said.
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The company disclosed that it had quoted a premium of USD 253.94 per metric tonne, citing global supply constraints, shipping route disruptions, and increased war-risk insurance costs, including longer transit routes via the Cape of Good Hope.
The firm has since rejected the cancellation, urging the government to respect the binding contractual agreement.
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Senate Probe the Deal
During the proceedings, lawmakers raised questions over the speed and structure of the deal, questioning whether proper legal and internal consultations were conducted before the company committed to the arrangement within two hours.
They also probed how the firm proceeded without a physical meeting, whether it was aware of existing government-to-government fuel procurement arrangements with Gulf states, and sought further clarity on profit margins and its prior experience handling such large-scale transactions.
In response, Maangi said that the communication method used by the Ministry was not unusual.
Lawmakers further raised concerns about the financial implications of the canceled deal, questioning who would bear the cost of the failed contract and its impact on taxpayers, and seeking details on the cost of importing petroleum products via the Cape of Good Hope route.
Concerns were also raised over missed opportunities, with members seeking an assessment of the costs associated with the aborted importation of the petroleum products.
In response, the company detailed the financial losses already incurred as a result of the cancellation.
