Uganda has initiated consultations with Tanzania to allow the Uganda National Oil Company (UNOC) to handle fuel imports after facing challenges in obtaining a license as a local oil marketer in Kenya. Energy and Mineral Development Minister Ruth Nankabirwa confirmed the discussions, revealing that she met Tanzanian President Samia Suluhu Hassan with a message from President Museveni.
The move comes after Kenya declined to issue a license to UNOC, leading Uganda to explore alternative routes for fuel imports. Minister Nankabirwa expressed the possibility of negotiating with the Tanzanian government to remove some taxes on fuel imports, enabling Uganda to import fuel from Tanzania.
Efforts to secure a stable and efficient supply of petroleum products are in advanced stages. An amendment to the Petroleum Supply Act of 2008 empowers UNOC in partnership with VITOL Energy Limited. The fuel marketing standoff with Kenya began in November last year when Uganda sought to register UNOC as a local marketer, aiming to eliminate middlemen in Kenya.
The Ministry of Energy pushed for an amendment to the Petroleum Supply Act to grant exclusive rights to UNOC for direct oil importation. Kenya’s Energy and Petroleum Regulatory Authority imposed conditions on UNOC, prompting a legal challenge in the Kenyan courts. The ruling is expected on February 12, with Uganda also suing Kenya at the East Africa Court of Justice.
Minister Nankabirwa stressed that Uganda’s decision for direct fuel importation aims to enhance the security of petroleum product supply. Despite legal challenges, UNOC was scheduled to commence importation at the beginning of this month. Uganda predominantly imports petroleum, with over 90% coming through Mombasa, and the Tanzanian route is being explored to ensure a secure and competitive market.
