Kenya and Uganda, two neighboring nations, have successfully resolved a dispute over oil imports. This resolution comes following a meeting between Ugandan President Yoweri Museveni and Kenyan President William Ruto. During their discussions, an agreement was reached that will allow Uganda’s state oil firm to import petroleum products through Kenya’s port of Mombasa. This decision aims to put an end to tensions between the two countries.
Uganda, a landlocked country, has been seeking alternative routes for importing petroleum products due to previous challenges. Historically, its oil retailers have received their cargo through affiliated firms in Kenya. However, Uganda has explored other options, including utilizing a Tanzanian port. Despite these efforts, the reliance on Kenyan firms has persisted for decades.
According to Solomon Muyita, spokesperson for Uganda’s ministry of energy and minerals, the implementation of the new arrangement is imminent. The first shipment under this system is anticipated to occur in May. This development marks a significant step forward in resolving the longstanding dispute between the two nations.
Kenyan Energy Minister Davis Chirchir has confirmed that Uganda’s National Oil Company (UNOC) will utilize the Kenya Pipeline Company to transport the petroleum products. This decision indicates that Kenya will continue to play a role in facilitating the transportation process, thereby benefiting from the arrangement.
In 2022, Uganda imported petroleum products worth $1.6 billion, with the majority originating from the Gulf region. Approximately 90% of these imports were routed through Kenya. However, Uganda aims to diversify its import routes and reduce dependence on a single corridor, hence the exploration of alternatives.
In November, Uganda announced plans to grant exclusive rights for petroleum product supply to a unit of the global energy trader Vitol, which would then supply UNOC. This decision stemmed from concerns over occasional supply vulnerabilities when relying solely on Kenyan firms for imports. Such vulnerabilities could lead to disruptions in retail prices within Uganda.
The meeting between President Ruto and President Museveni in Uganda last month signaled a commitment from both sides to resolve the disagreement. Media reports in Kenya highlighted this diplomatic engagement, underscoring the importance of cooperation between the neighboring nations in addressing shared challenges.
