Nairobi, July 4 -- South Sudan has flagged illegal fuel shipments from the port of Mombasa as Kenyan oil marketers bypass its Government-to-Government (G-to-G) deal.

Correspondence seen by Business Daily shows that Juba warned oil marketers on June 24 that fuel shipped outside the G-to-G framework risks being impounded, while companies involved face licence revocation.

South Sudan currently imports fuel under a G-to-G arrangement in which Kenya's Pacific Petroleum is the designated importer of petrol and diesel. The company then supplies licensed oil marketers operating in the country's retail market.

Pacific Petroleum admitted that it imported more expensive fuel cargoes outside the G-to-G framework following supply disruptions trigge...