Uganda government is on a marathon legislation to change the legalities involved in the importation of petroleum products.
Ninety percent of Uganda’s fuel imports are sourced from Kenya, while 10 percent comes from Tanzania.
Currently, the companies in the Gulf supply petroleum products to only three Kenyan companies that in turn sell to Uganda’s oil marketing companies.
Fuel pump prices in Uganda are painfuly rising, a situation that has triggered growing protests across the East African land locked nation.
Uganda’s President Yoweri Museveni accuses Kenyan middlemen for inflating fuel prices shipped to Kampala.
A tax on transit fuel cargo to Uganda by the Kenya Revenue Authority and management fees by local oil marketers selling petroleum products to Uganda are behind the latest round of protests according to Museveni.
The price of fuel has in the past three months increased from Ush4,900 ($1.29) to Ush5,400 ($1.42) per litre of petrol.
Dr Joseph Muvawala the executive director of the National Planning Authority (NPA) advised Kampala, to consider direct importation of crude from oil-producing and exporting countries.
According to him this direct importation of crude, would result in prices at the pump dropping by 15 to 20 percent.
“If we imported our crude, refined in Mombasa, it would lower the price of fuel,” Dr Joseph Muvawala said.
“Kenya has for decades decided what petroleum products Uganda buys, when, from where, how much, who buys and at what price,” says Uganda’s Energy Minister Ruth Nankabirwa.
Uganda has been using an open tender system under which local companies buy petroleum products from Kenya.
This system could be reaching its dead end because Nankabirwa has tabled the Petroleum Supply (Amendment) Bill 2023 in parliament, seeking to empower government-owned Uganda National Oil Company (Unoc) to take over the supply of oil.
If the bill is passed, Nankabirwa says Unoc will be the sole importer of petroleum and related products, supplied by Vitol Group. Unoc will then sell to private oil marketing companies.
Kenya could lose up to $100 million it has been earning from handling Uganda’s petroleum and related products per year.
About 40 percent of the fuel Kenya imports is exported, mostly through Uganda to the Democratic Republic of Congo and South Sudan.
