Uganda to end oil import deal with Kenya


Uganda's cabinet has given its approval to a proposed bill that would grant the state-owned oil company, Uganda National Oil Company (Unoc), the authority to procure and distribute oil within the country's domestic market. 

If the bill receives parliamentary approval, it will effectively bring an end to the existing arrangement of importing oil through Kenyan distributors.

The decision to pursue this change is motivated by the aim to enhance the security of Uganda's petroleum product supply. The Minister of Energy criticized the current arrangement with Kenya, highlighting the occasional vulnerabilities in supply that exposed Uganda to higher risks. 

Under the current system, Ugandan oil marketing companies were considered secondary in times of supply disruptions, leading to increased oil prices within Uganda.

Presently, over 90% of Uganda's fuel is imported through Kenya. In addition to the proposed bill, the Minister of Energy also revealed that an agreement has been reached between Uganda and Bahrain energy company Vitol Bahrain EC. 

This agreement will provide financial support to the Uganda National Oil Company as it transitions to self-sourcing and supplying oil within the country.

The energy minister of Uganda  presented a bill to parliament, proposing that exclusive rights be granted to the Bahraini company Vitol to be the sole importer of petroleum products into the country. 

The cabinet of Uganda has already given its approval to the proposed changes in the petroleum law. 

A deal has already been established between Uganda's state-owned Uganda National Oil Company (UNOC) and Vitol energy.

According to the agreement, Vitol will supply oil products to the Uganda National Oil Company, which will then sell the products to petrol station operators. 

The first shipment of petroleum from Vitol is anticipated to arrive in January. However, some oil marketing companies have expressed criticism of the deal, alleging that the Ugandan government is attempting to create a monopoly in the industry.

#Uganda #Kenya

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