Uganda Introduces Bill for Government Monopoly on Petroleum Product Imports

Kampala, Uganda | THE BLACK EXAMINER | The Minister of Energy and Mineral Development, Hon. Ruth Nankabirwa, has presented the Petroleum Supply (Amendment) Bill, 2023 to the Parliament of the Republic of Uganda. This legislation aims to oversee the importation and distribution of petroleum products in Uganda.

The Bill was introduced during a parliamentary session on October 31, 2023, presided over by Deputy Speaker Thomas Tayebwa.

Under this proposed law, the National Oil Company (UNOC) will be exclusively authorized to import all petroleum products and supply them to licensed Oil Marketing Companies (OMCs). OMCs, in turn, will continue selling these products to consumers through their established commercial channels and retail fuel stations.

Nankabirwa explained that the Bill is designed to address the gaps in the current legislation, primarily to mitigate sudden shortages of oil products and consequent price fluctuations.

“The existing law does not grant Uganda National Oil Company Limited the authority to supply all imports of petroleum products to licensed oil marketing companies for the Ugandan market. This loophole in the Petroleum Supply Act has posed a risk to the security of petroleum product supply in Uganda,” she stated.

Uganda currently relies on imports for over 90% of its petroleum products, with the majority arriving through the Port of Mombasa in Kenya and the remainder through the Port of Dar-es-Salaam in Tanzania. Until now, licensed Ugandan oil marketing companies have been responsible for independent imports using facilities in Kenya and Tanzania.

This arrangement has exposed Uganda to supply vulnerabilities, where Ugandan OMCs are considered secondary suppliers in case of disruptions. These vulnerabilities have led to additional challenges, resulting in higher costs for petroleum products and affecting retail prices.

With the proposed amendment to the Petroleum Supply Act, the Ministry of Energy and Mineral Development will take on the role of regulating the importation of petroleum products into Uganda.

Once signed into law by the President, the Bill is expected to bolster Uganda’s petroleum product stock levels and enhance the competitiveness of consumer and retail fuel prices, Nankabirwa noted.

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