Kenya has given the Uganda National Oil Company (UNOC) authorization to import petroleum products into Uganda beginning in May 2024, marking an important step towards regional energy cooperation.
This decision comes after the Kenyan government approved a certificate of incorporation, as stated by Hon. Ruth Nankabirwa, Minister of Energy and Mineral Development.
This came about as a result of a recent meeting that Ruth Nankabirwa and Kenya’s President, Dr. William Ruto, had on Monday in Nairobi.
After Uganda’s request to use the Kenya Pipeline Company (KPC) facilities to carry refined petroleum products from Mombasa Port was turned down, a meeting was called.
In September 2023, UNOC applied to be recognized as an Oil Marketing Company (OMC) by the Energy and Petroleum Regulatory Authority (EPRA) of Kenya. This recognition would enable UNOC to use KPC infrastructure and engage in fuel import and export activities like other OMCs in Kenya.
Nevertheless, UNOC’s application was turned down by EPRA, which stated that it did not fulfill the requirements for an oil importer license. Concerns over unfair competition and the possible displacement of Kenyan businesses were also voiced by EPRA. Uganda retaliated by contesting EPRA’s ruling and filing a lawsuit at the East African Court of Justice against Kenya.
After the meeting, President Ruto stepped in and helped to facilitate an out-of-court settlement that permits UNOC to start operations, according to Nankabirwa. The Chief Executive Officer of UNOC, Proscovia Nabbanja, is currently in Nairobi to pick up the certificate of incorporation, escorted by representatives from the Ministry of Energy.
In addition to the predicted drop in fuel costs, Nankabirwa said on Thursday that UNOC is set to gain significant experience in the oil sector when it begins importing petroleum products into Uganda. This experience is considered essential as Uganda gets ready to start extracting gas and oil from the refinery by 2025.
Presently, Tanzania imports the remaining 10% of Uganda’s fuel, with Kenya providing the other 90% of the supply. Under Nankabirwa’s direction, Uganda will continue to use the Tanzanian route for security reasons and to reduce logistics costs, which drive up the cost of petroleum goods in Ugandan markets.
During a transfer ceremony on Thursday at the Ministry Headquarters in Kampala, Minister Nankabirwa spoke to the media. Phiona Nyamutoro received an official handover of his responsibilities from Peter Lokeris, the former Minister of Energy (Minerals) and current Minister of Karamoja Affairs.
Due to the current lack of a direct pipeline from Dar es Salaam, fuel must currently be transported by road, partially across the lake via Mwanza, spanning a distance of 1,500 km from Dar to the border station at Mutukula. The costs of this route are high.
In related news, the East African Crude Oil Pipeline (EACOP) Coating plant was officially opened on Tuesday by Tanzanian Deputy Prime Minister and Minister of Energy, Dr. Doto Biteko, and her Ugandan counterpart, Dr. Nankabirwa, marking a historic milestone for both countries.
This accomplishment, which is situated in the Tabora Region’s Sojo Village, Nzege District, represents a major advancement in regional cooperation.
These developments highlight the significance of cooperative efforts in guaranteeing energy security and economic growth in the area as Uganda gets ready to navigate its energy landscape.
