The Uganda National Oil Company (Unoc) was scheduled to start exclusive importation this month, but encountered difficulties obtaining a crucial Petroleum Import License from Kenyan authorities. The ongoing stand-off has delayed Unoc’s plans to assume the monopoly on fuel imports, as outlined in a recently enacted law. However, the Ugandan government has allowed private firms to continue importing petroleum products into the country, averting potential fuel shortages and price hikes.
The conflict started when a new Ugandan law gradually reduced the need for costly gasoline imports by private companies, which infuriated Kenyan intermediaries. When Kenya’s Energy and Petroleum Regulatory Authority (Epra) refused to issue a vital Petroleum Import License, Unoc’s attempts to establish a monopoly were derailed. Uganda has used a clause in the petroleum law to allow private dealers to continue imports while Unoc seeks approval, while the legal dispute rages on.
The East African Court of Justice’s ruling in favor of Uganda rests on free trade promises made under the terms of the East African Community Treaty. Unoc’s head of Legal and Corporate Affairs, Mr. Peter Muliisa, expressed confidence that the agency would prevail in the court case. Originally set to begin exclusive importation in January, the dispute has caused delays that may result in the agency taking over in late February or early March.
A Government-to-Government (G-to-G) import mechanism between Unoc and Vitol, a multinational oil and commodities firm, was also postponed due to the dispute. With this new approach, Unoc will be able to buy products directly from Vitol, replacing the Open Tender System (OTS) and saving fuel expenses. Uganda was, therefore, compelled to extend the deadline for the exclusive importation of Unoc due to the ongoing legal issues.
Under the present Open Tender System, the Ugandan government has guaranteed the public’s continuous access to petrol through private dealers. Until the Unoc crisis is handled, private companies will import petroleum products, according to confirmation from the Ministry of Energy and Mineral Development.
