The Ugandan government has granted permission for private firms to continue importing petroleum products into the country, temporarily avoiding potential fuel shortages and price hikes resulting from a dispute with Kenyan fuel traders. The ongoing stand-off has delayed Uganda National Oil Company’s (Unoc) plans to assume the monopoly on fuel imports, as outlined in a recently enacted law. Unoc was set to commence exclusive importation this month but faced challenges obtaining a key Petroleum Import License from Kenyan authorities.
The dispute arose after the new Ugandan law phased out reliance on expensive fuel imports by private firms, angering Kenyan middlemen. Unoc’s monopoly plans faced setbacks when Kenya’s Energy and Petroleum Regulatory Authority (Epra) declined to grant a crucial Petroleum Import License. As the legal battle continues, Uganda has invoked a provision in the petroleum law, allowing private dealers to continue imports until Unoc secures clearance.
Unoc’s exclusive importation was scheduled to begin in January, but due to delays caused by the dispute, the agency may now take over in late February or March. Unoc’s head of Legal and Corporate Affairs, Mr. Peter Muliisa, expressed confidence that they would win the court case. Uganda’s case at the East African Court of Justice relies on free trade commitments made under the East African Community Treaty.
The dispute also delayed Unoc’s partnership with Vitol, a global energy and commodities company, under a Government-to-Government (G-to-G) import mechanism. This new plan aims to replace the Open Tender System (OTS) and reduce fuel costs by allowing Unoc to purchase products directly from Vitol. However, the ongoing legal challenges have forced Uganda to extend the timeline for Unoc’s exclusive importation.
The Ugandan government has assured the public of continued fuel supply through private dealers under the current Open Tender System. The Ministry of Energy and Mineral Development confirmed that private firms would import petroleum products until the Unoc situation is resolved.
