Uganda to cut fuel imports from Kenya over Ruto government-government oil deal with Saudi and United Arab Emirates (UAE) firms.
The cabinet in Uganda has approved a bill to be tabled in the country’s National Assembly that would cut its reliance on Kenya for fuel imports.
Uganda National Oil Company (UNOC) will now be tasked under the proposed bill with locating and importing petroleum products for the nation’s oil marketing companies (OMCs).
Kenya’s government-to-government oil deal with Saudi and United Arab Emirates (UAE) corporations has resulted in high pump prices and supply issues for Uganda, according to a statement made by the country’s Energy Minister Ruth Nankabirwa Ssentamu.
“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.”
The ministry claims that Mombasa Port receives 90.0% of Uganda’s petroleum product imports, with Dar es Salaam handling the remaining portion.
The fuel sold in Uganda is supplied by Kenyan OMCs to their affiliates in the neighbouring country. The minister now wants UNOC to source the products and supply them to local OMCs.
This would be a blow to Kenyan OMCs with outlets in Uganda as they would be forced to take part in a separate import deal 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.
