Five days after appearing to drop Kenya as the premium petroleum importing partner, Uganda’s President Yoweri Museveni promised that his country will now sell competitively priced fuel to neighboring countries including Western Kenya region.
In 2016, Uganda discovered oil reserves in Hoima Town, Western Uganda, and plans were previously announced that the oil from Uganda would be exported abroad via a pipeline from the Tanga Port in Tanzania via the Indian Ocean.
This will also cut out Kenya as one of the major transit routes for Uganda’s petroleum products.
“In a few years’ time, our Refinery will be up and running. I can assure the Inland East Africans of competitive petroleum products, free of distributions caused by middlemen. The whole of Uganda, North- Western Tanzania, Rwanda, Burundi, Western Kenya, South Sudan and Eastern DRC, will benefit,” said President Museveni.
Last week, Uganda also inked a five year deal to import petroleum products with a Bahrain based company- effectively cutting out Kenya as a middleman who sold oil to Uganda.
“We have now contracted bulk and refinery suppliers able to give us the lower prices. I have discussed this with H.E Ruto, the President of Kenya and our delegation is now in Dar-es-Salaam, discussing with Her Excellency Samia Suluhu. However, the internal parasites who have been cheating their country, have launched a social–media and mainstream media campaign against our liberation- resistance plan against okuseerwa (being over-charged).
As usual, we are ready to confront the parasites. H.E Ruto is handling the Kenyan part. I salute his contribution. In a few years’ time, our refinery will be up and running. I can assure the inland East Africans of competitive petroleum products, free of distributions caused by middlemen. The whole of Uganda, North- Western Tanzania, Rwanda, Burundi, Western Kenya, South Sudan and Eastern DRC, will benefit. Down with the social-media and mainstream media misinformers,” said President Museveni on November 5, 2023.
He had earlier accused Kenyan middlemen of inflating the cost of petroleum products sold to Uganda after importation, costing Uganda billions.
“Uganda imports petroleum products of the magnitude of 2.5billion litres per annum valued at about US$ 2bn. 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.
A check on one occasion a few months ago, showed that the middlemen were selling us petroleum products at prices as indicated below per tonne: 1. Diesel: I. Middlemen’s price – $118; II. Price from bulk suppliers or Refiners -$83; 2. Petrol: I. Middlemen’s price -$97.5; II. Bulk suppliers or Refiners’ price- $61.5; 3. Kerosene: I. Middlemen’s price – $114; II. Bulk suppliers or Refiners’ price – $79,” added President Museveni.
Last week, the Ugandan Ministry of Energy and Mineral Development announced it will now be importing its oil with Vitol Bahrain E.C in a 5 year deal which will be financed by the company. Uganda will also build its own refinery to buffer stocks in Uganda and Tanzania whenever supply disruptions occur.
This deal was signed after President William Ruto signed a government to government deal with the United Arab Emirates and the Kingdom of Saudi Arabia to manage some of the petroleum products importation challenges that Kenya was facing. This effectively saw the importation of fuel move from the Open Tender System which was price-competitive in nature to the government to government system which saw Uganda “exposed to occasional supply vulnerabilities where the Ugandan Oil Marketing Companies considered secondary whenever there were supply disruptions.”
The Kenyan government signed the Government to Government oil deal in a bid to lower the cost of fuel in the country as increased and new taxation pushed the cost per liter to historic highs for diesel, petrol and kerosene. nder the new deal, the Kenya Kwanza government renegotiated the freight and premium cost which will now see the Kenyan landing cost for diesel stand at Sh88 down from Sh118, petrol from Sh97.50 per freight to Sh 90 and Kerosene from Sh140 to Sh 111.70. But lower fuel prices are yet to be seen in Kenya following this deal.
