KRA says its role in petroleum supply chain limited to matters falling within its mandate

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Kenya Revenue Authority (KRA) has told the Senate that its role in the petroleum supply chain is limited to matters falling within its statutory mandate, principally customs clearance, tax assessment, levy collection, transit control, and trade facilitation.

KRA Commissioner in charge of Customs and  Border Control Lillian Nyawanda said that the state agency continues to support the steady and uninterrupted supply of petroleum products through expedited customs processes, prompt release of approved cargo, and timely assessment and collection of applicable duties, taxes, levies, and fees.

Dr Nyawanda told the Senate Energy Committee, chaired by Siaya Senator Oburu Odinga, that  KRA is not involved in the procurement process with the importation of petroleum products into the country being the sole mandate of the Ministry in charge of petroleum as provided for by the Petroleum (Importation) Regulations, 2023 (Legal Notice No. 3 of 2023).

“KRA promotes and supports the steady supply of petroleum products in the country by facilitating importation and customs clearance upon release by the concerned Partner Government Agencies, such as the Kenya Bureau of Standards, who are responsible for quality control,” said Dr Nyawanda.

The KRA Commissioner told Senators that this is achieved through the expedited processing of import documentation, timely assessment and collection of duties, VAT, levies, and other statutory charges, as well as the prompt release of cargo at petroleum depots in Mombasa and upcountry.

Tana River Senator Danson Mungatana sought comprehensive information on the applicable process for assessing, levying, and collecting taxes and other customs-based levies on all petroleum imports into the country by products category, and similarly indicate the process for all transit petroleum products, including highlighting the trends such as volumes and transit destinations in the last fiscal year to date.

Dr Nyawanda replied that the process of customs clearance of petroleum starts with Shipping lines submitting a cargo manifest in the Integrated Customs Management System (ICMS), which seamlessly gets transmitted to the Kenya Ports Authority system, with the Importer submitting a Notice of Intention (NOI) to KRA, indicating vessel name and product details.

“Upon arrival of the vessel, KRA and other Government Agencies go on board to ascertain vessel, crew, and cargo details. Submission by the importer of a warehousing customs declaration for the parcels for local use and subsequent payment of the applicable levies, i.e., Merchant Shipping Superintendent (MSS) levy,” said Dr Nyawanda.

The KRA Commissioner told Senators that the determination of petroleum quantities discharged from the importing vessel by the industry contracted quantity surveyor results in the issuance of an outturn report, which gives the quantities and their allocation to specific oil marketing companies based on initial import plans and any necessary adjustments by the importer.

She told Senators that Self-assessment of taxes by the Oil Marketing Companies in the ICMS system by way of customs declarations of petroleum for home use and payment of the applicable customs taxes, fees and levies (Import Duty where applicable, Excise Duty, VAT, Import Declaration Fees, Railway Development Levy, Road Maintenance Levy, Petroleum Development Fund/Levy, Petroleum Regulatory Levy, Anti-Adulteration Levy - for illuminating kerosene).

Kakamega Senator Boni Khalwale sought to know whether KRA has any information relating to the withdrawal of petroleum products on account of concerns about standards or quality of imported fuel or any other concerns, for the last six months to date, indicating the type of petroleum products, quantities involved, and ownership, including any penalties applicable by law.

Dr Nyawanda said that KRA is only aware of the directive by the Government to exit the petroleum product imported on the vessel MT. PALOMA, on account of being procured outside the G-to-G framework, with the Product being Premium Motor Spirit (PMS) owned by One Petroleum Ltd

“On April 7, 2026, the Cabinet Secretary, Ministry of Energy and Petroleum, issued a Press Release restricting the PMS consignment delivered by vessel MT. PALOMA from the local market and guided One Petroleum Ltd to exit the product from Kenya. Further, the Ministry of Energy and Petroleum guided on the re-consignment of the PMS consignment delivered by the vessel MT. PALOMA to the transit market,” said Dr Nyawanda.

Oburu asked the KRA Commissioner to elaborate on any legislative proposals or recommendations regarding existing gaps or weaknesses involving the importation (and export) of petroleum products, including proposals on the emergency procurement of petroleum products.

Dr Nyawanda said that, regarding the weaknesses identified in the importation of petroleum products, it is recommended that inter-agency data integration be strengthened and statutory reporting obligations among relevant government agencies be enhanced to improve information flow, operational efficiency, and accountability across the petroleum supply chain.