Budadiri West MP Nandala Mafabi has urged the government to permit the Uganda National Oil Company (UNOC) to engage in the importation and supply of fuel, competing alongside other companies. This call comes as Mafabi addressed the Parliament’s committee on natural resources and environment during their review of the Petroleum Supply Amendment Bill, 2023, which proposes granting UNOC a monopoly in the importation of fuel.
Uganda currently relies on a system where fuel companies purchase their supplies through affiliated firms in Kenya, which import the products on their behalf through the Mombasa port. Energy Minister Ruth Nankabirwa shared that Uganda intends to grant exclusive rights for the supply of all petroleum products to Vitol, a global energy trader, ending the existing system that relies on imports via Kenya. This proposed change aims to reduce supply disruptions and stabilize pump prices in Uganda.
As part of this shift, UNOC and Vitol Bahrain E.C. have negotiated a five-year contract, with Vitol providing the necessary working capital. According to data from the Bank of Uganda, petroleum product imports in Uganda amounted to $1.6 billion (sh6 trillion) in 2022. The Cabinet has approved amendments to the petroleum law, paving the way for Vitol to exclusively supply UNOC.
However, Budadiri West MP Nandala Mafabi, supported by Bukimbiri MP Eddie Kwizera, has raised concerns about granting a monopoly status to UNOC. They argue that in a liberalized economy, such a move contradicts Article 40 of the Constitution, safeguarding Uganda’s economic rights. Mafabi contends that this action would also violate the East African Competition Act of 2006, ratified by Uganda in 2011, and go against the spirit of the recently passed Competition Bill in Parliament.
To support his position, Mafabi references a precedent set in the case of Spedag Interfreight Uganda Ltd & 3 Others Vs Attorney General & The Great Lakes Ports Limited. In this case, the Constitutional Court ruled against granting monopoly status to The Great Lakes Ports in the clearing and forwarding business for 10 years, emphasizing the importance of maintaining a competitive environment. The court highlighted that such monopolies contravene the principles of the East African Customs Union, which promotes competition and free-market economies in the region.
Article 40 of the Constitution, cited by Mafabi, emphasizes the right of every person in Uganda to practice their profession and engage in lawful occupations, trades, or businesses. MP Eddie Kwizera adds that UNOC should be allowed to trade fuel alongside other companies, drawing a parallel with the government’s involvement in various sectors such as education, healthcare, and water supply, where it operates alongside other private entities.
