Negotiations between Uganda and Kenya about importing fuel are still happening, despite some confusion. Uganda denies reports that Kenya rejected its request to use the Kenyan pipeline for fuel transport. Both countries are working towards a deal that benefits them both.
Contrary to earlier news, Uganda insists that discussions with Kenya on bulk trading with Unoc (Uganda National Oil Company) are going well. Irene Batebe, the permanent secretary of the Energy ministry, stated that negotiations are progressing smoothly.
Uganda applied to Kenya’s Energy and Petroleum Regulatory Authority (Epra) to be recognized as an Oil Marketing Company (OMC) in Kenya. However, reports suggest that Epra rejected the application, citing failures to meet specific criteria.
Starting January 1 next year, Uganda plans to stop buying fuel from Kenyan companies and has signed a five-year contract with Vitol Bahrain EC for its fuel needs. Currently, 90 percent of Uganda’s fuel comes from Kenya.
President Museveni explained the decision to move away from the Kenyan arrangement, emphasizing the need to eliminate middlemen. According to him, Uganda incurs significant losses when purchasing from middlemen in Kenya.
As Uganda works on amending its petroleum supply law to accommodate the new fuel import deal, there are concerns about Unoc’s capability to handle the sole importation of fuel and gas products in the country. The amendments need to be completed before the end of the year to give effect to the Unoc-Vitol deal.
Energy minister Ruth Nankabirwa mentioned that Kenya might lock Uganda into a contract for another year if the law amendments face delays. The move towards securing fuel independently aims to make Uganda’s fuel products more affordable by cutting out the costs associated with middlemen.