Kenya has given the Uganda National Oil Company (UNOC) the green light to start importing petroleum products directly through its Mombasa port.
The development follows a resolution of legal matters about the licensing process in Kenya.
For months now, the two neighbouring countries have been at loggerheads after Kenya declined to issue landlocked Uganda, a permit to directly buy fuel at the former’s Mombasa port.
However, on Thursday, UNOC announced that the two parties involved in the constitutional petition filed in the high court of Kenya, sitting in Machakos, had opted to withdraw their petition, bringing an end to the feud.
UNOC is a government-owned company whose function is to handle Uganda's commercial interests in the petroleum sector.
UNOC said that recognising the lack of constitutional basis in the petition, it also consented to the withdrawal, effectively bringing the matter to a close.
“We are pleased to have resolved this matter and to move forward with our plans to import fuel through Kenya. This development contributes immensely to our journey to enhancing Uganda’s energy sector.” UNOC stated in a statement seen by the Nile Post.
The latest development comes on the backdrop of a meeting held on Monday between the Kenyan President, William Ruto and Uganda’s delegation led by Ruth Nankabira, the Minister of Energy and Mineral Development.
It is believed that following this meeting in Nairobi, Ruto brokered an out-of-court settlement giving UNOC, a green light to get the license to start importing fuel through Kenya.
According to UNOC, Work is currently underway to issue it the necessary permit that will enable Uganda to import fuel directly through the Kenya Pipeline Company.
For many years, Uganda has been largely relying on Kenyan resellers and middlemen for supply of petroleum products.
Available data shows Uganda imported $1.6 billion worth of petroleum products in 2022, mostly originating from the Gulf.
90% of the fuel products come from Kenya while 10% come from Tanzania.
However, Ugandan President, Yoweri Museveni, has in the past complained that Kenyan affiliated firms were inflating fuel prices by up to 58% even as global prices of the commodity continue to fall.
Museveni said the Kenyan resellers were “cheating” Uganda causing his country huge losses, hence the need for Uganda to buy fuel directly from the Kenyan port of Mombasa.
Meanwhile, according to the Ministry of Energy and Minerals, the first shipment under the new system is expected in May.
The new system is expected to stabilize fuel supply within Uganda and reduce reliance on Kenya as the former readies for its first oil production by 2025.
