Uganda’s Bold Move: Cutting Fuel Imports from Kenya Amidst Ruto’s Saudi Deal

Uganda's Bold Move: Cutting Fuel Imports from Kenya Amidst Ruto's Saudi Deal. PHOTO COURTESY
Uganda's Bold Move: Cutting Fuel Imports from Kenya Amidst Ruto's Saudi Deal. PHOTO COURTESY

Uganda’s cabinet has given its approval for a bill to be presented in the national legislature, aiming to reduce its dependence on Kenya for the supply of fuel.

Under the proposed legislation, the Uganda National Oil Company (UNOC) will be tasked with procuring and bringing in petroleum products for local oil marketing companies (OMCs).

In a statement issued by Uganda’s Energy Minister Ruth Nankabirwa Ssentamu, the nation expressed its concern about the expensive fuel prices and supply difficulties it has encountered over the recent months due to Kenya’s government-to-government agreement with oil companies from Saudi Arabia and the United Arab Emirates (UAE).

“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.”

As per the minister’s statement, Uganda primarily relies on Mombasa Port for 90.0% of its petroleum product imports, with the remaining portion entering through Dar es Salaam.

The supply of fuel in Uganda is currently managed by Kenyan OMCs, who provide it to their counterparts in the neighboring country.

However, the minister is now advocating for UNOC to procure the products and distribute them to domestic OMCs. This move could pose a challenge for Kenyan OMCs operating in Uganda, as they would be compelled to engage in a distinct import arrangement 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 additionally forged an agreement with Vitol Bahrain E.C. to assist in procuring and transporting oil for the East African nation. Vitol Bahrain E.C. will also store reserves in Uganda and Tanzania, further reducing the oil flow through Kenya.

SOURCE: NEWS AGENCIES

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