Uganda Picks Dar es Salaam Port for Oil Imports after Fallout with Kenya

Kampala, Uganda | THE BLACK EXAMINER | The Ugandan government, in collaboration with Vitol Bahrain E.C., a Bahrain-based company, has opted for the Dar es Salaam port as their oil import destination. This choice is part of their broader efforts to strengthen economic ties between Tanzania and Uganda. Vitol Bahrain E.C. recently received approval from the Uganda National Oil Company (UNOC) to supply oil in Uganda, paving the way for this decision.

Historically, Uganda has sourced 90% of its fuel imports through Kenya. However, the country expressed dissatisfaction with Kenya’s shift away from a transparent and competitively priced open tendering system for the Gulf deal without prior consultation.

The decision to choose Dar es Salaam follows Uganda’s dismay at being left uninformed about the negotiations concerning a government-to-government fuel agreement between Kenya and two Gulf nations. This decision had raised concerns in Uganda as it rendered the nation’s fuel supplies vulnerable and exposed its citizens to higher pump prices.

Uganda’s Energy and Mineral Development Minister, Dr. Ruth Nankabirwa Ssentamu, disclosed that UNOC and Vitol Bahrain E.C. have entered into a five-year contract. Vitol Bahrain E.C. will finance the partnership, offering a working capital facility supported by its global balance sheet, and will collaborate with UNOC to ensure competitive pricing of petroleum products. Additionally, Vitol Bahrain E.C. has committed to funding the expansion of storage capacity in partnership with UNOC, adding 320 million liters of storage at Namwambula, Mpigi.

Dr. Nankabirwa commended Vitol Bahrain E.C. as a strong partner with a substantial 2022 turnover of $505 billion, emphasizing its global trading presence and commitment to enhancing UNOC’s capabilities.

Earlier this year, the Ugandan government assigned UNOC the role of bolstering the country’s product stock-holding levels, contributing to the stabilization of consumer and retail fuel prices, as part of the revised 2003 Petroleum Supply Law.

During a special delegation visit to Tanzania on November 5, 2023, led by Dr. Nankabirwa on behalf of President Yoweri Kaguta Museveni, they expressed gratitude to President Samia Hassan Suluhu’s leadership and pledged cooperation between the two nations in the energy sector.

Uganda’s selection of the Dar es Salaam port was based on its efficiency and robust importation system for petroleum and gas energy. This strategic move is expected to ensure the availability of oil not only in Uganda but also across the East African region. Moreover, Uganda’s decision opens up opportunities to compete with Kenya for fuel markets in South Sudan, Rwanda, and the Democratic Republic of Congo (DR).