Uganda’s parliament on Tuesday passed a bill allowing the state-owned oil company Uganda National Oil Company (Unoc) to source and supply oil to the domestic market.
The passage of the bill, which now awaits ascension by President Yoweri Museveni, will see Uganda National Oil Company (UNOC) import the oil directly from the refineries.
During the debating of the bill, the Energy Committee’s chairperson Emmanuel Otaala said that the bill would ensure that Uganda does not rely on Kenyan companies that were acting as middlemen.
He went on to say that Kenya instituted the quantities for the Kenyan Domestic Market and for onward transit to neighbouring countries at a 60:40 ratio respectively.
“In essence, all the fuel imported through Kenya is retained in the Kenyan market and Neighboring countries including Uganda, Rwanda and the Democratic Republic of Congo have to share the 40 per cent allocation,” he stated.
However, In the new plan, the oil will still be transported through Kenya. MPs who supported the bill said it would reduce fuel costs by cutting out middlemen and fuel cartels that arbitrarily influence fuel pricing.
Uganda’s Energy Minister Ruth Nankabirwa recently said that the country needed to stop importing oil through Kenyan companies as it exposed Uganda to occasional supply vulnerabilities where Ugandan oil marketing companies were considered secondary whenever there were supply disruptions.
according to Ms Nankabirwa, Uganda, imports more than 90% of its fuel through Kenya’s Mombasa port and the remainder through Tanzania’s Dar es Salaam port.
The country is also seeking to find new routes for their oil transportation at Museveni is considering entering an agreement with Tanzania.