President Yoweri Museveni defended the Ugandan government’s recent decision to bypass middlemen and directly purchase fuel from refineries, citing substantial financial losses incurred by Ugandans. The President expressed his frustration with the handling of the issue by relevant officials, emphasizing the need for a more cost-effective approach.
In a statement released on ‘X’ questioned the logic of the entire nation purchasing fuel from middlemen based in Kenya and other locations when an alternative strategy could be pursued.
He proposed that Uganda should buy fuel directly from refineries abroad and then transport it through Kenya and Tanzania, thereby eliminating the additional costs associated with intermediaries.
“Without my knowledge, our wonderful People, were buying this huge quantity of petroleum products from middlemen in Kenya. A whole country buying from middlemen in Kenya or anywhere else!! Amazing but true,” Said Museveni.
“Why not buy from the Refineries abroad and transport through Kenya and Tanzania, cutting out the cost created by middlemen? Those involved were not bothered by these issues?” He asked.
Museveni disclosed that he had initially become aware of this issue a few years ago through whistleblowers. He had entrusted the former Minister of Energy and Mineral Development, Goretti Kituttu, to address the matter.
However, to his dismay, he later discovered that the issue had not been resolved. Further investigation revealed substantial financial losses incurred by the country due to the procurement of fuel through middlemen.
The President provided a breakdown of prices per tonne for various types of fuel, comparing costs from middlemen to those from bulk suppliers or refiners. The figures clearly illustrated that purchasing directly from refineries was a more cost-effective option.
This decision aligns with recent changes to Uganda’s petroleum law, which allow Vitol to exclusively supply fuel to the state-owned Uganda National Oil Company (UNOC) at subsidized rates.
This development is poised to have a significant impact on the middlemen in Kenya who have historically supplied 90% of Uganda’s oil. Uganda’s Energy Minister, Ruth Nankabirwa, confirmed that Vitol and UNOC had already finalized a contract for exclusive supplies, with the first deliveries expected to commence in January.