Kenya’s Alleged Interference in Uganda’s Oil Import License Sparks Tensions

Kenya's Alleged Interference in Uganda's Oil Import License Sparks Tensions
Kenya's Alleged Interference in Uganda's Oil Import License Sparks Tensions

A potential diplomatic dispute looms as a result of President William Ruto’s administration not granting Uganda a license to import fuel.

On November 7, Ugandan President Yoweri Museveni alleged that Kenyan intermediaries in the oil industry were artificially raising fuel costs in Uganda.

Consequently, he instructed Uganda’s state-owned Uganda National Oil Company (UNOC) to commence oil importation, a resolution endorsed by the Ugandan parliament a week afterward.

However, a month has passed, and UNOC has not initiated fuel importation, still depending on Kenyan oil marketing companies.

In an effort to be acknowledged as an Oil Marketing Company (OMC) in Kenya, Uganda had submitted an application to the Energy and Petroleum Regulatory Authority (EPRA).

Yet, Ruto’s administration had not yet approved the neighboring country’s request.

Reports suggest that Kenya had concerns that Uganda might benefit from its infrastructure despite not fulfilling their initial oil agreement. Uganda was accused of not providing proof of operating five licensed retail stations and a licensed depot in Kenya, among other issues.

In response, Uganda has given an ultimatum, announcing its intention to independently import petroleum products from February 2024. Reports indicate that Uganda is determined to import fuel through Mombasa Port, regardless of whether they have the required license.

UNOC, in its strategy, aims to focus solely on the importation process to avoid being vulnerable to inflated fuel prices imposed by Kenyan Oil Marketers.

“Why not buy from the refineries abroad and transport through Kenya and Tanzania, cutting out the cost created by middlemen?” Museveni had directed UNOC.

The Ugandan oil corporation declared that it wouldn’t participate in transporting the fuel upon its arrival in Mombasa.

The strategy for enforcing the directive to utilize Kenyan ports for fuel import without a license by UNOC remained unclear.

Annually, Uganda imports 2.5 billion liters of fuel, costing Ksh300 billion, with 90 percent of this volume being imported through Kenya and a meager 10 percent through Tanzania.

SOURCE: NEWS AGENCIES

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