KRA demands Ksh5.1 Billion from Firms linked to Oil Cartels

A disputed petroleum cargo has triggered a tax battle involving the Kenya Revenue Authority and oil marketing companies, with KRA pursuing about Sh5.1 billion in taxes linked to fuel that was imported under an emergency arrangement.

The cargo was brought in by One Petroleum and later became the subject of commercial and regulatory disputes after intended buyers declined to take delivery.

KRA says taxes remained payable regardless of the commercial dispute and has pursued several oil marketers it says were linked to the transaction.

The case highlights the risks associated with emergency fuel procurement, where rapidly changing commercial arrangements can leave companies and government agencies arguing over liability for billions of shillings in taxes.

Kenya failed to stop suspect fuel cargo despite concerns over quality and tax liability

Kenyan authorities failed to prevent a disputed petroleum cargo from entering the country despite concerns over the quality of the fuel, customs clearance and a rapidly escalating tax dispute involving oil marketers.

The cargo, imported by One Petroleum under an emergency supply arrangement, became stranded after intended buyers declined to take delivery. MT Paloma, the vessel carrying the fuel, threatened legal action over delays at the Port of Mombasa as the consignment remained offshore for weeks.

The Kenya Revenue Authority later pursued approximately Sh5.1 billion in taxes linked to the cargo, while affected oil companies disputed whether they were liable for fuel they had not ultimately taken.

The episode has raised questions about oversight of emergency petroleum imports, coordination among energy agencies, customs authorities and oil marketers, and how Kenya verifies fuel quality before cargoes are released into the domestic market.