Oil deal gone wrong: Why EPRA DG Daniel Kiptoo is in DCI custody

Four senior government officials are being held at the Directorate of Criminal Investigations (DCI) headquarters after detectives uncovered what sources describe as a scheme to import fuel outside Kenya's official government-to-government procurement framework.

Investigators allege the arrangement would have cost taxpayers at least Sh8 billion.

Energy and Petroleum Regulatory Authority (EPRA) Director General Daniel Kiptoo, Kenya Pipeline Company (KPC) Managing Director Joe Sang, Petroleum Principal Secretary Mohamed Liban, and senior petroleum official Simon Wafula were arrested in coordinated early morning raids on April 3, 2026.

Detectives from the DCI's Operations Support Unit picked the four up separately from their homes.

Sources close to the investigation say officers recovered over Sh100 million in cash from the suspects' residences during the operation.

Liban was questioned at DCI headquarters and later released on medical grounds.

Investigations against him, however, are continuing.

Kiptoo, Sang, and Wafula were held at Gigiri Police Station before being transferred for questioning, where they were grilled for over seven hours alongside their lawyers, with family members waiting outside.

Investigators say the scandal revolves around the MV Paloma, a vessel carrying over 60,000 metric tons of fuel that docked at the Port of Mombasa last week.

The consignment originated from Saudi oil giant Aramco, was purchased by BP, and was initially destined for Angola.

Sources indicate the ship was diverted to Mombasa through a Kenyan oil importer identified as Wan Petroleum, which facilitated the offloading of the cargo.

Discharge began on March 27 and was completed on March 29.

The four officials are suspected of clearing the importation outside Kenya's existing government-to-government (G2G) oil procurement framework, the structure through which the country sources all its petroleum.

Sources allege the consignment was overpriced by at least Sh4 billion.

A second vessel had been scheduled to deliver a similar consignment under the same arrangement.

Sources indicate the projected combined cost to Kenyan taxpayers from both vessels would have reached Sh8 billion.

The arrests appear to have thwarted the landing of the second ship.

Following Sang's arrest, the KPC board appointed General Manager of Finance Pius Mwendwa as acting Managing Director.

In a statement, the board said it is monitoring the situation and engaging with relevant institutions to understand the scope of the allegations.

The DCI has confirmed investigations are ongoing, with officers pursuing additional individuals suspected to be involved in the scheme.

The arrests land at a difficult moment for Kenya's energy sector.

Fuel stocks currently stand at 16 days for petrol and 19 days for diesel, both below the legally required 21-day reserve threshold, as supply disruptions from the Middle East conflict continue to bite.