Uganda to Cut Fuel Imports From Kenya Over Ruto Deal With Saudis
Uganda’s cabinet has approved a measure that would reduce the country’s reliance on Kenya for fuel imports. The bill will be presented to Uganda’s National Assembly.
In the proposed legislation, the Uganda National Oil Company (UNOC) will be tasked with procuring and importing petroleum products for the country’s oil marketing companies (OMCs).
In a statement released by the country’s Energy Minister Ruth Nankabirwa Ssentamu, Uganda remarked that the country has in the past months encountered costly pump prices and supply challenges following Kenya’s government-government oil deal with Saudi and United Arab Emirates (UAE) firms.
“Despite the price-competitive nature of the Open Tender System in Kenya and its relatively normal supplies, it exposed Uganda to occasional supply vulnerabilities where the Ugandan OMCs were considered secondary whenever there were supply disruptions,” Dr Ssentamu stated.
“These vulnerabilities paused additional challenges, resulting in Uganda receiving relatively costly products and ultimately impacting the retail pump prices.”
According to the minister, Uganda imports 90.0 percent of its petroleum products through Mombasa Port while the remainder comes through Dar es Salaam.
Kenyan oil marketing companies supply their Ugandan affiliates with the petroleum sold in the neighboring country. Now, the minister desires that the UNOC procure the products and distribute them to local OMCs.
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This would be detrimental to Kenyan OMCs with outlets in Uganda, as they would be required to enter into a separate import agreement with UNOC.
“The Uganda National Oil Company (UNOC) will be responsible for sourcing and supplying petroleum products to the licensed Oil Marketing Companies (OMCs) involved in importing the products to Uganda,” the minister noted.
“Therefore, the OMCs will continue selling the products to consumers through their commercial arrangements and the retail fuel pumps.”
UNOC has also engaged in an agreement with Vitol Bahrain E.C. to assist in the sourcing and importation of oil for the East African nation. The Bahraini company will maintain reserves in Uganda and Tanzania, reducing the movement of goods through Kenya even further.
“To guarantee the security of supply, the partnership has ensured that there will be buffer stocks in Uganda and Tanzania to be called upon should there be supply disruptions to the country. The Partner has also committed to finance the construction of additional capacity in partnership with UNOC of 320 million liters at Namwambula, Mpigim,” Ssentamu remarked.
Uganda to Cut Fuel Imports From Kenya Over Ruto Deal With Saudis
