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Net Gas and Energy Limited has won a High Court order compelling the Kenya Revenue Authority (KRA) to release about 432,393 litres of petroleum products that customs officers held back until the company posted a KSh21.3 million bank guarantee.
In a judgment delivered on 9 November 2026, Justice T.W. Ouya of the Judicial Review Division quashed KRA’s demand for a 12-month guarantee of KSh21,332,115 and ordered the consignment released “forthwith”. The fuel is valued at about KSh93.5 million.
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Why KRA held the Net Gas and Energy fuel
The company said it paid KSh42,474,841 in taxes on fuel stored at a depot, with full duty paid on 30 July 2026. KRA still detained part of the consignment and, in letters dated 2, 4 and 16 September 2026, made its release conditional on the guarantee as security for a “potential penalty” under section 203(e) of the East African Community Customs Management Act (EACCMA).
Net Gas and Energy said no penalty had been assessed or compounded, and that KRA gave no computation for the figure. It blamed a system malfunction affecting e-slips for the irregularities KRA was investigating, and said the entries were lodged by its clearing agent. KRA argued that sections 106 and 229(6) of EACCMA allowed it to demand security, that protecting revenue outweighed the firm’s commercial interest, and that the company should first have used the customs review process.
The Net Gas and Energy case was heard after the court granted the company leave on 7 October 2026 and exempted it from first exhausting the customs review route under section 9(4) of the Fair Administrative Action Act.
Importers can check how agents and entries work in our guides to licensed customs agents in Kenya and lodging a declaration on iCMS.
What the court found
In the Net Gas and Energy judgment, the judge said KRA’s letters “shifted grounds” between section 203(e) and section 229(6), and that the September letters wrongly presented the guarantee as a recommendation of KRA’s Investigations and Enforcement department, which had in fact recommended unconditional release. KRA could not fix this by offering a new legal framework in its court affidavit, the judgment said, calling the attempt “impermissible”.
The court also held that neither section 106 nor section 229(6) allows KRA to demand security for an unadjudicated criminal fine once import duty has been paid in full, and that no seizure notice was issued under section 214. Holding fuel worth more than four times the guarantee was “punitively disproportionate”, the judge said, noting that pump prices are reviewed monthly by EPRA.
Orders issued
| Order | Effect |
|---|---|
| Certiorari | Quashes the KSh21,332,115 guarantee demand in the 2, 4 and 16 September 2026 letters |
| Mandamus | KRA must release the roughly 432,393 litres without any guarantee or security |
| Prohibition | KRA barred from demanding security for an unassessed penalty before releasing duty-paid goods |
| Costs | Awarded to Net Gas and Energy |
What it means for fuel importers
For Net Gas and Energy, the order ends a detention that the court said caused storage penalties, contractual exposure and commercial losses. The ruling limits how customs can use detention as leverage while a case is still under investigation, at least where duty has already been paid. KRA’s investigation can continue, but the judge said it could “proceed independently without detaining the physical goods”. KRA may still appeal.
The case comes as customs collections climb; see our report on KRA revenue crossing KSh1 trillion by October 2026. Current pump prices are in our EPRA fuel prices for November 2026 update, and taxpayers weighing a dispute can read about settling KRA disputes through ADR.
Frequently asked questions
What did the court order KRA to do?
Release about 432,393 litres of Net Gas and Energy’s petroleum products immediately, without requiring a bank guarantee, and pay the costs of the case.
How much was the guarantee KRA demanded?
KSh21,332,115, for 12 months, as security for a possible penalty under section 203(e) of the EACCMA.
How much tax had Net Gas paid?
KSh42,474,841, with the full duty paid on 30 July 2026, according to the judgment.
Who delivered the judgment and when?
Justice T.W. Ouya of the High Court Judicial Review Division, on 9 November 2026, in JR Application E382 of 2026.
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