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When Iran's attacks on oil facilities in the Gulf closed the Strait of Hormuz in early March, Kenya's government faced a scramble to replace a cargo of petrol stuck at the Port of Jebel Ali in Dubai. The solution it chose created a billion-shilling opportunity for one of Mombasa's most politically connected businessmen.
One Petroleum, a subsidiary of Mbaraki Bulk Terminal Ltd linked to tycoon Mohammed Jaffer, was among just two local firms cleared by the Ministry of Energy to import 60 tonnes of petrol each outside Kenya's existing government-to-government deal with three Gulf oil majors. The premium it charged for that cargo was $290 per tonne. The going rate under the G-to-G deal was $84 per tonne. That gap, at more than three times the normal cost, was to be built into the pricing formula used to set national pump prices on April 15, meaning Kenyan consumers would absorb the difference at the fuel station.
The second company cleared alongside One Petroleum was Oryx Energies.
The crisis that opened the door
Iran attacked at least 18 merchant ships along the Strait of Hormuz in response to US-Israel strikes against the country, effectively halting the movement of fuel from the Persian Gulf to global markets. Nearly a quarter of the world's liquefied natural gas and petroleum passes through the strait. Iran, Iraq, Kuwait, Qatar and Bahrain all depend on it to move their oil exports. When the route closed, a vessel carrying 114.7 million litres of petrol from Emirates National Oil Company was unable to leave Jebel Ali, leaving a gap in Kenya's supply chain that the Ministry of Energy scrambled to fill.
Industry sources said at the time that a section of importers already operating under the G-to-G deal opposed using outside firms to plug the shortfall, citing the premium differential and its effect on pump prices. The ministry overruled those objections and cleared the two emergency cargos.
One Petroleum discharged its consignment. Oryx arrived later.
"We are looking at an increase of at least Sh19 per litre on account of the premiums alone," one industry source told local media at the time. "Then we also add the global benchmark prices for March, which are higher than February. The effect is going to be huge unless the government goes for a significant subsidy."
The empire behind the deal
Mohammed Jaffer built the MJ Group into a conglomerate now valued at more than Sh16.3 billion. Its holdings include Mbaraki Bulk Terminal at the Port of Mombasa, Grain Bulk Handlers, Africa Gas and Oil Company and One Gas Ltd. Grain Bulk Handlers controls the bulk of Kenya's liquefied petroleum gas imports and dominates the LPG transit market to neighbouring countries. Mbaraki Bulk Terminal handles multi-petroleum product storage at the port.
Company records list Jaffer family members, including Mojtaba Mohamed Jaffer, Ali Abbas Jaffer and Mohamed Husein Jaffer, as directors of One Petroleum, alongside Solomon Esebwe Mwanjuma Ondego, Ali Salaah Balala as executive director and Jonathan James Stokes. Nicholas Kokita serves as company secretary.
Jaffer has maintained connections across successive Kenyan administrations since the era of President Daniel arap Moi. He was previously aligned with former opposition leader Raila Odinga but repositioned himself after President William Ruto's 2022 election victory. In April 2023, Ruto attended the launch of Grain Bulk Handlers' new grain-handling terminal in Embakasi, Nairobi, publicly endorsing the facility's role in addressing food security.
The relationship has not been without turbulence. In 2021, the Kenya Revenue Authority went to court accusing the Jaffer family's oil and gas firms of Sh68 million in tax evasion. A Sh17.9 million Mombasa land fraud charge was filed against Jaffer in 2017, and a Sh65 million Kenya Pipeline Corporation conspiracy charge followed in 2019.
The money
At $290 per tonne for a 60-tonne consignment, One Petroleum's premium payment above the G-to-G rate came to roughly $17,400, or approximately Sh2.26 million, on the cargo alone. But the larger financial consequence was structural. The inflated premium was to be folded into the national pricing formula used by the Energy and Petroleum Regulatory Authority to calculate pump prices for the April 15 to May 14 cycle, passing the cost directly to consumers across the country.
Without a government subsidy to absorb the difference, the April review was expected to produce the highest fuel prices in months, covering petrol, diesel and kerosene. Treasury Cabinet Secretary John Mbadi warned lawmakers that a prolonged disruption to Gulf energy and trade routes could have massive consequences for the broader Kenyan economy.
The Ministry of Energy did not respond to queries about how the high premiums would be treated in the pricing formula or whether a subsidy would be applied to protect consumers.
Inside the G-to-G deal
Kenya's G-to-G framework was introduced in March 2023 to address a dollar shortage and stabilise fuel supply through 180-day credit arrangements backed by letters of credit from Kenyan banks. Saudi Aramco, Emirates National Oil Company and Abu Dhabi National Oil Company are the three Gulf suppliers. Galana Energies, Gulf Energy and Oryx Energies have been the three Kenyan oil marketing companies distributing on their behalf.
By mid-November 2023, imports under the scheme had reached approximately $3.7 billion, with letters of credit worth more than $784 million settled. In March 2026, the Ministry of Energy extended the deal to 2028.
Energy and Petroleum Regulatory Authority Director General David Kiptoo subsequently disclosed in a television interview that One Petroleum and Asharami Synergy had been incorporated into the G-to-G framework, expanding the number of participating Kenyan oil firms from three to five. Jaffer's company had moved from emergency outside importer to formal participant in the country's strategic fuel supply arrangement.
The alternative routes
With the Strait of Hormuz closed, Gulf exporters including Saudi Aramco shifted to alternative shipping routes. Roughly 239.1 million litres of petrol were to be loaded at the Port of Antwerp-Bruges in Belgium for shipment via the Red Sea-Mediterranean route, with vessels expected to dock at Mombasa between April 16 and April 27. A further 81.15 million litres of dual-purpose kerosene and 75.6 million litres of diesel were to be loaded at Sikka Port in India, with arrival in Mombasa expected between April 12 and April 21.
The alternative routing resolved the immediate supply gap but did not alter the pricing consequences of the two emergency cargos already imported at elevated premiums. Those costs were already embedded in the April review cycle.
For Jaffer, the sequence of events produced something that rarely happens at once: an emergency clearance, a premium three times the normal rate, national pricing implications that ensured the full cost would be recovered, and formal incorporation into the G-to-G deal that governs Kenya's fuel supply for at least another two years.
