Nominated Senator Paul Njoroge was arrested late on Tuesday after he drew his gun on Vivo Energy Managing Director Polycarp Igathe and shot twice in the air in a dispute over a fuel station.
The gun drama occurred at a Shell fuel station on the Nakuru-Naivasha highway earlier on Tuesday.
He is due to appear in court on Wednesday to face charges.
The dispute got ugly after Vivo Energy staff went to the station to take possession.
Senator Njoroge could be seen in video footage seated on a chair as Igathe stood near him.
They engage in a heated conversation before Senator Njoroge drew the gun and shot in the air twice, saying nobody would take possession of the station.
Igathe was quoted in media reports saying the station had not had fuel for several days, affecting customers.
Njoroge denied the claims and blamed the dispute on business rivalry.