Kenya is set to grant a license to the Uganda National Oil Company (UNOC), resolving a prolonged dispute that escalated to the regional court and strained diplomatic relations between the two nations.
According to Energy Cabinet Secretary Davis Chirchir, efforts are underway to authorise UNOC to directly import fuel via the Kenya Pipeline Company (KPC).
His revelations comes days after a case filed at the High Court in Machakos to block the licensing of Unoc was withdrawn. Sources said the licence is likely to be issued next month. The licensing could end the dispute and allow Unoc to buy fuel from Vitol Bahrain.
“You will see Unoc getting a licence and then we will see how to work together because usage of our pipeline is an opportunity for us,” Mr Chirchir said.
The CS added, “They will employ Kenya Pipeline Company’s infrastructure so there will be no loss of opportunity, KPC will remain as the transporter. We are working closely with Uganda to resolve the challenge.”
The case is yet to be determined but issuing the license is likely to end the case at the regional court as the two countries move to avert a diplomatic fallout. Unoc’s decision to commence direct fuel imports from Vitol Bahrain is expected to impact the revenues of local oil marketing companies that have historically supplied Uganda.
While Unoc has traditionally supplied fuel to State-owned entities in Uganda, it is now poised to expand its market to include private oil marketers. Uganda initiated plans for the direct imports arrangement through Unoc several months after Kenya announced a deal with Gulf majors to import fuel on a 180-day credit period.
This move aimed to alleviate dollar demand pressures and support the stability of the shilling.
