The Ministry of Energy and Minerals in Uganda has proposed a bill in parliament with the aim of reducing the country’s reliance on Kenya for the importation of petroleum products.
The motivation behind this move is to address concerns regarding occasional supply vulnerabilities and rising fuel prices when relying on Kenyan imports.
Uganda has identified these vulnerabilities as posing challenges, leading to higher costs of petroleum products and impacting retail fuel prices.
“These vulnerabilities paused additional challenges, resulting in Uganda receiving relatively costly products and ultimately impacting the retail pump prices,” read part of the statement.
The decision has been partly triggered by Kenya’s government-to-government importation deal with the United Arab Emirates (UAE) and Saudi Arabia, which has raised concerns in Uganda.
If the proposed bill is passed into law, Uganda intends to take on a more active role in regulating the importation of petroleum products into the country. The Uganda National Oil Company Limited (UNOC) would be granted the authority to source and supply petroleum products for its domestic market.
At present, Uganda imports over 90 percent of its petroleum products through the Port of Mombasa in Kenya, and the remaining portion comes through the Dar es Salaam port in Tanzania.
This importation is carried out independently by licensed Ugandan Oil Marketing Companies (OMCs), but it is facilitated through the importation structures in Kenya and Tanzania.
To ensure a consistent and secure supply of petroleum products, Uganda plans to establish buffer stocks within the country. Additionally, Uganda may call upon Tanzania in case of supply disruptions, thus enhancing the security of supply.
The statement also highlights that the Ugandan government is engaged in active discussions with the Kenyan government to ensure a smooth implementation of this policy change. Both countries share a commitment to regional stability and economic growth.
