UGANDA NATIONAL OIL
COMPANY (Unoc) Has Started Selling Petroleum Products To Oil Marketing Firms In
Tanzania And Uganda As It Tests The Market Ahead Of Rolling Out A Direct Import
Deal With Vitol Bahrain.
Unoc Is Set To Start
Directly Importing From Vitol Bahrain Under A Five-Year Deal, As Uganda Moves
To End Decades Of Relying On Kenyan Oil Marketing Companies (Omcs) For Supply
Of Fuel.
Uganda And Kenya Fell Out
After Nairobi Inked A Government-Backed Deal To Import Fuel On Credit From
Three Gulf Oil Majors. Kampala Says Middlemen In The Deal Have Led To High Pump
Prices.
Vitol Is A Switzerland-Based
Dutch Oil Multinational. It Partly Owns The Fujairah Refinery In The United
Arab Emirates (UAE).
Uganda Kicked Off Plans
For The Deal Months After Kenya Announced An Agreement With The Gulf Majors To
Import Fuel On A 180-Day Credit Period To Ease Dollar Demand And Prop Up The
Shilling.
Kenya Started The
Government-Backed Deal With Saudi Aramco, Abu Dhabi National Oil Corporation And
Emirates National Oil Company In April Last Year. The Deal Was Set To Expire At
The End Of Last Year But Was Extended To December 2024.
Uganda Imports An Average
Of 2.5 Billion Litres Of Petroleum Annually Valued At $2 Billion (Ksh265 Billion),
With Kenya Pipeline Company (KPC) Handling At Least 90 Percent Of The Cargoes.
Besides Hitting Local Omcs,
The Unoc Deal With Vitol Bahrain Will Also Significantly Hurt KPC's Revenues
From Transit Fuel.
Transit Fuel Provides At
Least 40 Percent Of The Dollars That Kenya Needs To Pay For Fuel Imports Under
The Government-To-Government Deal. This Is Because Transit Fuel Is Paid For
Using Dollars.
Unoc Had Targeted To Make
The First Imports Under The Deal Between January 10-12 This Year But Missed The
Target After It Failed To Get A Licence From Kenya.
The Licence From The Energy
And Petroleum Regulatory Authority (Epra) Is Key To Helping Unoc Access The
Storage And Transport Network Of KPC From The Port Of Mombasa To Kisumu.
Epra Declined To Issue
The Licence On Grounds That Unoc Has Failed To Comply With The Law. Epra Cited Unoc’s
Failure To Show Proof Of Owning A Licensed Petroleum Depot And At Least Five
Retail Stations In Kenya.