The Consumers Federation of Kenya (COFEK) has moved to court seeking to stop the implementation of a new 25-year oil storage and handling agreement involving Gulf Energy.
The consumer organisation is challenging the deal, which is estimated to generate about KSh93 billion in projected revenue over its 25-year period.
COFEK has raised concerns over the agreement and wants the court to suspend its implementation as the legal challenge is considered.
The deal involves the storage and handling of crude oil and is linked to Kenya Pipeline Company facilities.
The organisation's move comes amid wider public debate over the management of Kenya's petroleum infrastructure and the role of private companies in the country's fuel supply chain.
COFEK has asked the court to intervene before the agreement proceeds further, arguing that the public interest should be considered in the implementation of the long-term arrangement.
The case now places the agreement under judicial scrutiny, meaning the parties involved will have an opportunity to respond to the concerns raised by the consumer organisation.
The dispute is also likely to attract attention because of the value and length of the proposed contract.
As the matter proceeds, the court will consider the issues raised by COFEK and the responses from the parties involved before making any determination on the agreement.
The legal challenge comes at a time when Kenya continues to review how its petroleum storage facilities and fuel-import arrangements are managed.