Uganda sues Kenya over oil importation
The Ugandan authorities have filed a lawsuit against Kenya regarding the agreement to import petroleum oil through the Mombasa port.
In a submission made to the East African Court of Justice, Uganda, represented by its Attorney General, asserts that the Kenyan government has hindered EPRA from granting them a permit to import oil from Mombasa to Uganda.
According to legal papers submitted on December 28, 2023, Uganda asserts that about 90% of its refined Petroleum products are brought in via the Port of Mombasa in Kenya. These products are then conveyed to Uganda using the pipeline managed by the Kenyan Pipeline Company Limited (KPC).
The inland nation mentions that historically, the Oil Marketing Companies (OMC) in Kenya have managed the import and distribution of refined petroleum products to Uganda via the Kenya Open Tender System (OTS) and later through the Government-to-Government deals that Kenya implemented at the start of 2023.
As per the agreement, oil marketing companies (OMCs) functioning in Kenya bring in petroleum products and subsequently vend these identical products to OMCs in Uganda.
“The complete reliance and dependency on Kenyan OMCs to import and supply petroleum products to Uganda have exposed the Republic of Uganda to supply vulnerabilities resulting in an avoidable increase in fuel pump prices,” Uganda states in court documents.
Moreover, the Ugandan government implemented a change in policy regarding how petroleum products are sourced, imported, and supplied for the Ugandan market.
Therefore, Uganda authorized the Applicant via Uganda National Oil Company (UNOC) to exclusively import and distribute all petroleum products within the Ugandan market.
As a result, in April 2023, Uganda initiated discussions with Kenyan officials regarding a fresh policy regarding the acquisition, import, and distribution of petroleum products intended for use within Uganda.
The authorities in Kenya, adhering to the principles and regulations outlined in the treaty and its subsequent protocols, guaranteed the Ugandan authorities their steadfast assistance in executing the mentioned policy.
“Upon engagements with the relevant authorities in Kenya, UNOC sought to enter into a Storage and Transportation Agreement with KPC. Consequently, UNOC was required by the Respondent to meet certain regulatory requirements including obtaining an Import, Export, and Wholesale of Petroleum Products (except LPG) Licence (hereinafter referred to as “the Licence”) from EPRA to utilize the petroleum transit infrastructure in Kenya, especially the Kenya Pipeline systems in furtherance of the new Ugandan policy.”
Uganda stated that it considered the requirements to be an unnecessary obstacle to carrying out its petroleum policy since the petroleum products in question were solely meant for transit and not intended for Kenya.
EPRA additionally mandated UNOC to furnish various documents and fulfill a series of conditions for EPRA to review and grant the License.
The Minister of Energy and Mineral Development, representing UNOC, sent a letter to the Ministry of Energy and Petroleum in Kenya, asking to exempt specific license requirements because they were deemed irrelevant, unfeasible, or unreasonable.
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The Ministry of Energy and Petroleum’s Cabinet Secretary in Kenya indicated to the Applicant a plan to propose the Applicant’s request for an exemption from certain criteria to the Kenyan Cabinet for review.
After the Cabinet’s determination, the Cabinet Secretary of Kenya’s Ministry of Energy and Petroleum urged EPRA to promptly assess and adjust the logistical setup for petroleum imports to correspond with the recent policy change in Uganda.
A Petition was lodged in the High Court of Kenya at Machakos on November 7, 2023, while EPRA had yet to decide on UNOC’s renewed application, which had been pending for more than two weeks since it was resubmitted.
“The High Court of Kenya at Machakos on 7 November 2023 without according to the Applicant and/or UNOC a hearing, inter alia, issued conservatory orders restraining EPRA from granting an Import, Export, and Wholesale of Petroleum Products (Except LPG) license to UNOC”, the court documents read.
Additionally, the restraining orders from the conservatory issued on November 7, 2023, which included preventing EPRA from giving the License to UNOC, were prolonged from December 6, 2023, to December 19, 2023. Subsequently, on December 19, 2023, these orders were extended again until January 22, 2024. [Please find enclosed an authentic copy of the Ruling labeled as “RMO-S.”]
Uganda consistently requested the Republic of Kenya to intervene to prevent its governmental bodies from violating the principles and regulations outlined in the Treaty and Protocols.
Uganda asserts its status as a landlocked nation and claims its entitlement, as per the Treaty for the Establishment of the East African Community and the United Nations Convention on the Law of the Sea, which the Republic of Kenya has ratified. This entails the right for Uganda to access and exit the sea, as well as unrestricted passage through Kenyan territory using various modes of transportation.
Uganda seeks a declaration asserting that the aforementioned actions by Kenya violate specific provisions outlined in Articles 5(1), (3)(a), (b), and (h); 6(b), (d), and (f); 7(1)(a) and (b); 8(1)(a) and (c); 23; 27; 28; 76(1); 89(b) and (e); 90(j); 93(c) and (d); and 130 of the Treaty for the Establishment of the East African Community, along with Articles 3(2), 4(2)(a), 5(1), 18, and 38 of the Protocol.
“A declaration that the action of the Republic of Kenya restraining EPRA from issuing the Licence to the Applicant contravenes Articles 5(1), (3)(a), (b) and (h); 6(b) (d) and (f); 7(1) (a), (b); 8(1)(a) and (c); 23; 27, 28; 76(1); 89(b) and (e); 90(1); 93(c) and (d); and 130 of the Treaty for the Establishment of the East African Community and Articles 3(2), 4(2)(a), 5(1), 18 and 38 of the Protocol”, Uganda claims.
It also seeks a statement asserting that the Republic of Kenya’s act, which forbids granting any exemption from the licensing conditions for the License to the Applicant, goes against the provisions outlined in the Treaty for the Establishment of the East African Community, as well as Articles 3(2), 4(2)(a), 5(1), 18, and 38 of the Protocol.
A permanent injunction was issued against the Republic of Kenya for imposing unrealistic restrictions on UNOC accessing the KPC system.
Uganda sues Kenya over oil importation